ASIC AFS and Credit Licences — What They Are and Why They Matter
ASIC issues two main types of financial services licences: the Australian Financial Services (AFS) Licence and the Australian Credit Licence (ACL). Here's what each covers and what a licence check tells you about a supplier.
Overview
The Australian Securities and Investments Commission (ASIC) administers two major financial services licensing regimes that cover a wide range of financial service providers. Understanding which licence applies — and verifying the entity actually holds one — is critical when engaging financial services suppliers.
Australian Financial Services (AFS) Licence
An AFS Licence is required under the Corporations Act 2001 for any entity that provides financial services in Australia, including:
- Financial product advice (personal or general)
- Dealing in financial products (buying, selling, issuing, varying)
- Making a market for financial products
- Operating a registered managed investment scheme
- Operating a custodial or depository service
There are approximately 6,500 current AFS licensees. Many financial advisers operate as authorised representatives of an AFS licensee rather than holding their own licence.
Australian Credit Licence (ACL)
An ACL is required under the National Consumer Credit Protection Act 2009 for any entity that engages in consumer credit activities, including:
- Providing credit — personal loans, mortgages, car finance, credit cards
- Credit assistance — mortgage broking, finance broking, debt negotiation
- Lessor activities — consumer leasing (e.g., equipment leasing to individuals)
There are approximately 4,400 current ACL holders. Note: business-to-business lending where the credit is predominantly for business purposes is exempt from ACL requirements.
What does Gumshoe check?
Gumshoe's Credit Licence tile queries the ASIC Credit Licensee Register by ABN. For a match, it returns:
- Licence number
- Status (Current / Cancelled / Suspended)
- Issue date
- Cancellation date (if applicable)
A separate AFS Licence check queries the AFS Licensee Register and the Financial Advisers Register in a single tile.
Why does this matter?
Engaging a financial services provider that does not hold the required ASIC licence exposes you to risk:
- Any advice received may not carry professional indemnity insurance
- You have limited AFCA (Australian Financial Complaints Authority) recourse
- The provider may be operating illegally, raising solvency and conduct concerns
A cancelled or suspended licence is a red flag that warrants investigation before proceeding.