A recently issued ASIC instrument, which commenced on 15 August, amends an existing instrument to extend the Australian Financial Services (AFS) licensing exemption for financial counselling services to small businesses with less than 100 employees. Prior to this, the definition of “financial counselling service” applied only to individuals.
The existing 2017 instrument was put in place on the back of the bushfire disasters at the time, and enabled financial counselling agencies to provide free and independent services to people in financial difficulty.
It means that for certain circumstances, service providers were released from the requirement to hold an Australian financial services (AFS) licence when providing financial product advice as part of their financial counselling activities.
Under the more dire conditions that the country is now battling, the new instrument widens the application of the exemption to include clients that are small businesses (defined for this purpose as having less than 100 employees).
The explanatory statement explains the details further.