AFS licensee and responsible entity obligations

To operate a registered scheme, responsible entities must hold an AFS licence and comply with their AFS licensee and responsible entity obligations.

The relevant AFS licensee obligations under Chapter 7 of the Corporations Act are set out in Table 1.

Table 1: Summary of AFS licensee obligations

The responsible entity of a registered scheme must also comply with obligations under Chapter 5C of the Corporations Act when exercising its powers and carrying out its duties. It must, for example:

• act honestly and exercise the degree of care and diligence that a reasonable person would exercise if they were in the responsible entity’s position (see sections 601FC(1)(a) and (b))
• act in the best interests of the members, and if there is a conflict between the members’ interests and its own interests, give priority to the members’ interests (see section 601FC(1)(c))
• treat members who hold interests of the same class equally, and members who hold interests of different classes fairly (see section 601FC(1)(d))
• ensure that the scheme’s constitution meets the requirements of the Corporations Act (see section 601FC(1)(f)), and
• ensure that the scheme’s compliance plan meets the requirements of the Corporations Act (see section 601FC(1)(g)).

Disclosure obligations

Responsible entities will need to comply with their disclosure obligations under Chapter 7 of the Corporations Act. These obligations include the obligation to provide a Product Disclosure Statement (PDS). Additional guidance is outlined in Regulatory Guide 168 Disclosure: Product Disclosure Statements (and other disclosure obligations) (RG 168), Regulatory Guide 221 Facilitating digital financial services disclosures (RG 221) and Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (RG 97).

Design and distribution obligations

Responsible entities also need to comply with the design and distribution obligations.

For further information on these obligations see Design and distribution obligations for schemes.

Auditing compliance plans

Responsible entities must appoint an auditor for a registered scheme’s compliance plan. The auditor must audit the compliance plan within three months of the end of the financial year of the registered scheme and provide a report to the responsible entity: see section 601HG(3).

Responsible entities must then lodge their compliance plan audit report with ASIC, together with a copy of Form 5111 Compliance plan audit report of a registered scheme. The form and audit report must be lodged within three months of the end of the financial year.

We monitor the lodgement of these reports on an ongoing basis. If you have not lodged your report on time, or the report raises an issue of concern to us, we may contact you for an explanation.

Appointing or ceasing the appointment of a scheme auditor

To appoint or cease a scheme auditor, download and complete the relevant form(s): see Table 2.

Table 2: Forms to appoint or cease a scheme auditor

For more information on resignation or removal of auditors of registered schemes, see Information Sheet 64 Resignation and removal of auditors of registered scheme financial report or a compliance plan (INFO 64).

Annual statements

Within two weeks of your review date (usually the anniversary of your scheme's registration date) we will send you a copy of your annual statement. You only need to respond if the particulars in the annual statement are incorrect or we have asked questions to respond to. If you need to respond, you must respond within 28 days of receiving the annual statement. Further information on how to respond will be contained in the annual statement.

For more information about annual statements, see Information Sheet 3 Annual statements (INFO 3).

Lodging the financial accounts and audit of a scheme

Responsible entities must prepare a financial report and directors’ report each financial year for its registered schemes: see section 292(1). They must lodge these reports, together with the auditor’s reports for its registered schemes, online with ASIC: see section 319(1) and Form 388 Copy of financial statements and reports.

The reports must be lodged within three months after the end of the financial year: see section 319(3).

We monitor the lodgement of these reports on an ongoing basis. If you have not lodged the reports on time, or we are concerned by issues in the report, we may contact you for an explanation.

Risk management

Responsible entities must have adequate risk management systems in place. Responsible entities must have documented risk management systems that identify, assess and manage all material risks of the business and each registered scheme operated. Regulatory Guide 259 Risk management systems of fund operators (RG 259) provides guidance for responsible entities on our expectations for compliance with this obligation, including liquidity management and cyber risk management.

Reportable situations

If an AFS licensee knows that, or is reckless with respect to whether, there are reasonable grounds to believe that a reportable situation has arisen, they must report the situation to ASIC:  see section 912DAA. 

You must submit your report via the prescribed form available in the ASIC Regulatory Portal. You must report the situation, generally within 30 days, after you first know that, or are reckless with respect to whether, there are reasonable grounds to believe that a reportable situation has arisen. Regulatory Guide 78 Breach reporting by AFS licensees (RG 78) provides further guidance on the breach reporting obligations for AFS licensees and our assessment of breaches.  

Applying for relief

Responsible entities may apply for relief from the financial services provisions under certain circumstances.

For more information about applying for relief, see Seeking relief from financial services provisions that apply to managed funds.

Changing the name of a registered scheme

To change the name of a registered scheme, its responsible entity must lodge a copy of Form 5140 Notification of proposed change of name of registered scheme with ASIC. The proposed name of the scheme must not be the same as the name of a current registered scheme, or the name of a proposed scheme that has already lodged an application with ASIC.

As the name of a registered scheme is reflected in the scheme’s constitution, you must also lodge a modified or replacement constitution that shows the name change.

Modifying or replacing constitutions

The constitution of a registered scheme may be modified, or repealed and replaced with a new constitution by a special resolution of members’ of the scheme or by the responsible entity if it reasonably considers that the change will not adversely affect members’ rights: see section 601GC.

The responsible entity must lodge a copy of the modification or the replacement constitution with ASIC. The modification, or repeal and replacement, cannot take effect until the copy has been lodged: see section 601GC(2).

You must also lodge a consolidated copy of the registered scheme's constitution if we direct you to do so: see section 601GC(3).

Download and complete a copy of Form 5101 Notification of change to managed investment scheme's constitution and lodge it with a copy of the modification or replacement constitution. The address for lodgement is:

Australian Securities and Investments Commission
GPO Box 9827
Melbourne VIC 3001

For information on the requirements for executing the scheme documents, please see the FAQs for executing documents.

Modifying or replacing compliance plans

A responsible entity must lodge a copy of a modification or replacement compliance plan with ASIC. The plan must be lodged within 14 days after the modification is made or the compliance plan is repealed: see section 601HE(3).

A modified or replacement compliance plan must still comply with the general content requirements for compliance plans. That is, it must set out adequate measures that the responsible entity will apply in operating the scheme to comply with its legal obligations and the constitution. For more information, see RG 132.

Each director of the responsible entity must sign the modification or replacement compliance plan for ASIC to accept lodgement: see section 601HE(3). A modified or replacement compliance plan may be signed by an agent of the directors. In this case, the agent's authority or copy of the agent's authority verified by a director of the responsible entity must be lodged.

We may ask you to lodge a consolidated copy of a compliance plan with ASIC.

There is no prescribed form for notifying ASIC. Lodge your modification or replacement compliance plan by mailing it with a covering letter to:

Australian Securities & Investments Commission
GPO Box 9827
Melbourne VIC 3001

For information on the requirements for executing the scheme documents, please see the FAQs for executing documents.

Changing responsible entity

The responsible entity of a registered scheme can be changed:

• If the responsible entity wants to retire and members approve a replacement responsible entity at a members’ meeting
• If members seek to change the responsible entity and approve a replacement responsible entity at a members’ meeting, or
• If the Court appoints a temporary responsible entity (see Part 5C.3 of the Corporations Act).

You must notify ASIC of a change of the responsible entity of a registered scheme. You must lodge Form 5107 Notification of change of responsible entity of a registered scheme.

A company cannot be chosen or appointed as a replacement responsible entity unless it:

• is a public company, and
• holds an AFS licence authorising it to operate the registered scheme that is the subject of the change of responsible entity.

Note: See section 601FA of the Corporations Act.

If a responsible entity of an existing registered scheme is to be changed, the replacement responsible entity will generally need to apply for an AFS licence. The licence must have an authorisation to operate a registered scheme(s) of the same asset kind as the existing scheme.

If the replacement responsible entity already has an AFS licence, it may need to apply to vary its existing licence to authorise it to operate the registered scheme. The responsible entity does not need to vary its existing licence if the licence authorises it to operate registered schemes of a particular asset kind and the assets of the existing registered scheme are the same kind.

If a licence application is required, the replacement responsible entity should apply well before any members’ meetings (which are required to be held under section 601FL or 601FM of the Corporations Act) are scheduled. We will not accept a Form 5107 for lodgement unless:

• the replacement responsible entity has an AFS licence authorising the operation of the scheme, and
• the members' meetings as required under section 601FL or 601FM have been held.

A separate Form 5107 is required for each registered scheme.

What you need to lodge with Form 5107

When lodging Form 5107, you will need to also lodge copies of the following documents:

• notice of meeting of the members of the scheme (see section 601FL(1)), and
• minutes of the meeting, signed by the Chair, verifying that the resolution(s) to replace the incumbent responsible entity were passed.

Effective date

The change in the responsible entity only takes effect when we update the ASIC registers: see section 601FJ. This cannot be a retrospective date.

You may advise ASIC in an annexure to Form 5107 of a date in the future when you wish the change to take effect (and to the extent possible, we will seek to accommodate this request). Otherwise, the date of effect will be the date we proceed to process the Form 5107 in the ordinary course.

Lodgement due date

The outgoing responsible entity must notify ASIC of the change within two business days after the resolutions are passed. If the outgoing responsible entity does not do this, the new responsible entity may notify ASIC.

Given the short lodgement timeframe, the outgoing responsible entity should plan to provide the notification to ASIC and may wish to e-mail the Form 5107 and attachments to Licensing.AFSLProofs@asic.gov.au.

Email document lodgement

The following managed investment scheme forms may be lodged by email.  

• Form 5101 - Notification of change to managed investment scheme’s constitution – modification, replacement or consolidated
• Form 5102 - Compliance plan for managed investment scheme – modification or replacement
• Form 5116 - Notice of withdrawal offer regarding registered scheme
• Form 5118 - Notice of proposal to wind up registered scheme
• Form 5130 - Notification of office at which register of interests is kept
• Form 5138 – Notification of commencement or completion of winding up of a registered scheme
• Form 5140 - Notification of proposed change of name of registered scheme
• Form 6010A – Application for voluntary deregistration of a managed investment scheme

Note: There are no printed versions of Form 5102, Form 5116 and Form 5118 available to complete. 

Email the completed forms to MISchemeforms@asic.gov.au.

Download the email document lodgement policy (PDF 148 KB)

Further information

You can also subscribe to our publication ASIC Managed Investment Handbook. It contains links to our regulatory guides together with associated legislative instruments that grant relief from relevant provisions of the financial services law, and pro formas that can be used by professionals for specific situations including relief instruments, licence conditions, declarations, deeds, determinations, notices, waivers, approvals and consents.