Change of Control of your AFSL – do I notify ASIC?
When there is a change of control to your Australian Financial Services Licence (‘AFSL’), do I need to specifically notify the Australian Securities and Investments Commission (‘ASIC’)?
Introduction
We had an enquiry on this topic from a client recently so wanted to go over the key steps a licensee should consider when there is a change of control of their AFSL.
Anecdotally, we have also become aware that ASIC has been recently pursuing licensees when ASIC become aware of changes in control over the AFSL entity, but the entity has failed to notify ASIC of the relevant change.
Why does this matter?
Boards, Responsible Managers and Compliance Managers of AFSLs need to be vigilant about the regulatory implications of ownership and control changes to their licensed business. That is because a change of control, whether through a share sale, merger, restructure, or investment can trigger specific obligations under the Corporations Act 2001 (Cth).
For ASIC-regulated licensees, these obligations are a test of whether the licensee maintains the capability, resources, and organisational competence required to continue providing financial services efficiently, honestly, and fairly.
Handled well, the change process can demonstrate to ASIC and other stakeholders that the board and management prioritise transparency and regulatory compliance. Handled poorly, it can expose the business to breach reporting, potential enforcement action and reputational harm.
Change of control
Under the Corporations Act, a ‘change of control’ generally refers to a change in the ability to determine the composition of a licensee’s board or to control more than 50 per cent of voting shares. In the context of AFSL holders, this is a regulatory flag, because ASIC grants AFSLs based on the people, capabilities, structures, and financial resources in place at the time of the grant of the AFSL.
If these underlying elements change materially, ASIC wants to know. In most cases, the notification should be made before the end of 30 business days after the day the new controlling entity starts to control the AFSL holder.
Changes of control can arise in multiple ways, including:
Acquisition of a majority shareholding in the licensee;
Merger with another entity;
Transfer of the licence-holding entity into a new corporate group; or
Significant changes to ownership trusts or holding structures.
Importantly to note, a change of control is not always obvious. For example, layered corporate structures, shareholder agreements, or convertible instruments can trigger control changes even if day-to-day operations initially appear unaffected.
AFSL holders: Why control changes matter
From ASIC’s perspective, an AFSL is granted to a particular company under specific circumstances. A control change can materially alter those circumstances, particularly if:
The new owners bring different risk appetites, priorities, or business models;
Responsible Managers or key personnel change;
Compliance resourcing is impacted; or
The licensee’s financial position is negatively impacted due to reduced financial resourcing.
These changes can impact the licensee’s ongoing ability to meet obligations such as:
Providing financial or credit services efficiently, honestly and fairly;
Maintaining competence through engaging qualified Responsible Managers;
Ensuring adequate financial, technological, and human resources; and
Upholding compliance measures under ASIC’s Regulatory Guides, AFSL conditions and the Corporations Act.
What does ASIC generally expect?
When a control change occurs, ASIC expects licensees to:
Notify ASIC promptly - best practice suggests within 10 business days of becoming aware of the change, by submitting ASIC form FS20 (refer to the Corporations Act s912DA, and Regulation 7.6.04(2) of the Corporations Regulations 2001). Note that the lodgement of the FS20 is a separate licensee exercise compared to the lodgement of form 484 regarding standard changes to company information, for example changes to directors, secretaries, addresses, share structures, and other company details.
Review ongoing licence compliance - ensuring that post change of control, the licensee still meets the general obligations under s912A of the Corporations Act.
Assess Responsible Manager coverage - confirming that Responsible Managers’ competencies align with the new or expanded business model.
Document and evidence the change process - including board resolutions, due diligence records, and updated compliance policies.
Failure to comply with these requirements can lead to regulatory action, including suspension or cancellation of the AFSL.
Governance implications: the board’s role
A proactive board will treat a change of control as a governance event requiring structured oversight. Best practice can include:
Early identification - Boards should monitor strategic decisions, investment proposals, and corporate transactions for potential control implications.
Pre-change planning - Engage legal and compliance teams early to prepare notifications, assess licence implications, and manage stakeholder communications.
Post-change review - Conduct a gap analysis of governance, risk and compliance capabilities following the change.
• Stakeholder transparency - Communicate clearly with regulators, clients, and staff to maintain confidence in the Board’s methods of governance and oversight.
A Governance or Compliance Committee, whether formal or informally convened, can serve as the oversight body to support control change obligations meeting ASIC’s requirements.
How to manage a change of control effectively
A structured and methodical approach to managing control changes can reduce risk:
Due diligence - Assess incoming shareholders’ character, financial standing, compliance history and overall cultural fit with the existing business, for example risk appetite and ongoing compliance commitment / resourcing.
Regulatory mapping - Identify all notifications, approvals, and potential downstream regulatory impacts (for example, AUSTRAC registration updates, APRA notifications for dual-regulated entities if applicable).
Licence ‘health check’ - Review whether licence authorisations still match the intended business activity.
Responsible Manager continuity - maintain or replace RMs without leaving capability gaps.
Policy updates - Refresh governance, risk, and compliance documentation to reflect new corporate structures.
Conclusion
For AFSL holders, a change of control is not just a commercial transaction, it is a regulatory event with strict timelines and documentation requirements.
Boards and Responsible Managers must ensure that any change is managed transparently, promptly, and in full alignment with ASIC’s expectations.
An effective, well-planned process can demonstrate to ASIC that the licensee is committed to strong governance, meets its licence obligations post shareholder change, and continues to operate with integrity and capability consistent with the Corporations Act.
If your board is contemplating a transaction that could trigger a control change, or if you are unsure whether an upcoming corporate restructure might require ASIC notification, it is worth seeking advice early. If you’d like an obligation free conversation about your needs in this regulatory space, please contact me.
Timely proactive plans and action can help protect your licence, your clients interests and your business reputation.