Under the Corporations Act, an AFS licensee (AFSL holder) holds the licence and is directly responsible for complying with obligations under section 912A, while an Authorised Representative is authorised by the licensee to provide financial services on its behalf and operates under the licensee’s supervision and responsibility.
Expanded Answer
An AFS licensee is the entity granted an Australian Financial Services Licence by ASIC and is responsible for meeting the general obligations in section 912A of the Corporations Act. These obligations include providing services efficiently, honestly and fairly, maintaining compliance systems, managing conflicts, and supervising representatives. The licensee is accountable for the conduct of its business and the actions of its representatives.
An Authorised Representative (AR) is an individual or entity authorised under section 916A to provide financial services on behalf of the licensee. The AR does not hold their own licence and instead operates within the scope of the authorisation granted. The licensee remains responsible for ensuring the AR is competent, trained, and adequately supervised, and for monitoring the advice and services provided.
The key distinction is accountability and control. The AFS licensee bears primary legal responsibility for compliance, systems, and supervision, while the AR delivers advice or services under that framework. Regulatory risk increases where licensees fail to properly supervise ARs or where ARs act outside their authorised scope.
For further context, see A practical guide to Australian financial services licences (AFSL) and Who is accountable for AFSL compliance?.
Why it matters
Misunderstanding the distinction can lead to gaps in supervision, unclear accountability, and breaches of s912A obligations. ASIC enforcement often focuses on licensees failing to oversee AR conduct effectively.
Unsure how this applies to you?
Get a clear answer in a 15-minute call with a compliance specialist. Book your call.
Practical guidance
- Define the scope of authorisation clearly for each Authorised Representative under s916A.
- Implement supervision and monitoring frameworks to meet s912A obligations for AR oversight.
- Ensure AR competence, training, and ongoing review are documented and regularly tested.
Further reading
Thinking about self-licensing