ASIC Class Order [CO 11/927]

Administered by Department of the Treasury

Legislation au F2011L02658 Not in force Legislative Instrument

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ASIC CLASS ORDER [CO 11/927]

 

EXPLANATORY STATEMENT

 

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

 

The Australian Securities and Investments Commission (ASIC) makes ASIC Class Order [CO 11/927] under paragraph 911A(2)(l) of the Corporations Act 2001 (the Act).

 

Paragraph 911A(2)(l) of the Act provides that ASIC may exempt a class of persons from the requirement to hold an Australian financial services licence (AFSL) for a financial service.

 

Persons who provide financial product advice are required to hold an Australian financial services licence. “Financial product advice” is defined in section 766B of the Corporations Act and means a recommendation or statement of opinion or a report of either of those things that:

 

(a)   is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
 

(b)   could reasonably be regarded as being intended to have such an influence. 

 

1. Background

 

In 2003, ASIC provided a limited exemption to financial counselling agencies from the requirement to hold an AFSL under the Corporations Act 2001 to enable them to provide financial product advice to persons where the advice was provided in the context of the overall financial counselling service. The exemption is set out in ASIC Class Order [CO 03/1063].

 

The conditions imposed upon exempt service providers were that services were provided to consumers at no cost, that the agency did not otherwise carry on a business that would otherwise require a financial services licence and that certain other requirements relating to training were met.

 

ASIC Class Order [CO 03/1063] defined a “financial counselling service” as a counselling and advocacy service provided predominantly for the purposes of assisting individuals who are in financial difficulty due to circumstances such as debt over-commitment, unemployment, sickness or family breakdown.

 

When framing the National Consumer Credit Protection Act 2009 (the Credit Act) and the National Consumer Credit Protection Regulations 2010 (the Credit Regulations), this licensing exemption was substantially adopted in subregulation 20(5) of the Credit Regulations to exempt financial counsellors from the credit licensing requirements.

 

Following the implementation of the new national consumer credit regime, ASIC undertook an assessment of the range of non-commercial services provided to consumers and small business principally by non-Government organisations in relation to financial and credit issues to consider any regulatory issues arising in relation to the new credit regime or the existing financial services licensing requirements. ASIC identified a spectrum of services inclusive of services directed toward:

 

  • low income and/or disadvantaged consumers and people in financial hardship;
  • primary producers and rural small businesses; and
  • capacity building programs such as financial literacy programs.

 

ASIC considers that the financial literacy services provided by money management service providers, principally to Indigenous consumers in regional and remote Australia, should be exempt from the requirement to hold an AFSL in relation to the provision of financial product advice about basic deposit products for the reasons set out below.

 

ASIC Class Order [CO 11/926] also exempts these service providers from the credit licensing requirements for providing “credit assistance” under the Credit Act.

 

Money management services

 

Money management services are financial literacy and capacity building services designed to assist people to better and more safely use financial products and services such as basic deposit products and consumer credit. Money management service providers are not exempt under ASIC Class Order [CO 03/1063] as these services provided by these providers are qualitatively different from general financial counselling services. The objectives of money management service providers include:

 

  • helping people better understand and use financial products and services including credit;
     
  • assisting and empowering people to make better informed decisions about managing their money including developing the skills to budget, save and manage debt;
     
  • helping people manage immediate financial pressures and create sustainable, long-term behaviours and outcomes; and
     
  • making appropriate referrals to other services such as financial counselling services or legal services for further specialist assistance.

 

The provision of financial product advice about basic deposit products is not the core business of money management service providers. However, it may be provided from time to time depending upon the circumstances and financial position of the client in the context of the broader service.

 

2. Purpose of the class order

 

ASIC Class Order [CO 11/927] gives a limited exemption from the Australian financial services licensing requirements to money management service providers in relation to the provision of financial product advice limited to advice about basic deposit products where it is provided as part of the money management service.

 

The purpose of the exemption for money management service providers is to ensure that their services can continue to be provided to consumers, principally Indigenous consumers in regional and remote Australia. This exemption recognises the important assistance and support money management services give to consumers to access and use basic deposit products in more cost effective and sustainable ways.

 

This relief is given to money management service providers that deliver services within the parameters set by the Government funding and supervisory arrangements. This exemption is designed to support the continuing provision of these services within a consistent regulatory framework without imposing a disproportionate regulatory burden on service providers that would otherwise make their services unviable.

 

3. Operation of the class order 

 

Money management services

 

Under the relief, a money management service provider may lawfully provide financial product advice about basic deposit products without holding an Australian financial services licence provided:

 

  • the financial product advice is provided as part of the money management service; and
     
  • no fees or charges are payable by the consumer for any aspect of the money management service; and
     
  • the service provider ensures its representatives have adequate skills, knowledge and experience to satisfactorily provide the financial product advice and any other aspect of the money management service.

 

4. Consultation 

 

Before making this class order, ASIC consulted with the Commonwealth Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA). ASIC also consulted with money management services and financial counselling agencies.

 

 

 

 

 

Overview

The Corporations Act 2001 was enacted to provide a comprehensive regulatory framework for corporations in Australia, including financial services and products. ASIC Class Order [CO 11/927], issued by the Australian Securities and Investments Commission (ASIC) under the Corporations Act, aims to exempt certain money management service providers from the requirement to hold an Australian financial services licence (AFSL) when providing financial product advice about basic deposit products. This exemption was introduced to address the need for these providers to continue delivering essential services to consumers, particularly Indigenous consumers in regional and remote areas, without the burden of unnecessary regulatory requirements. The policy objective is to ensure the ongoing viability and accessibility of money management services that assist people in understanding and using financial products and services effectively. This is achieved by allowing these services to be provided without an AFSL, provided that the advice is given as part of a broader money management service, no fees are charged to consumers, and the service providers ensure their representatives are adequately skilled and experienced.

Scope and Application

The ASIC Class Order [CO 11/927], made under the Corporations Act 2001, provides a limited exemption from the requirement to hold an Australian financial services licence (AFSL) for money management service providers when they provide financial product advice about basic deposit products as part of their money management services. This exemption applies to service providers delivering financial literacy and capacity building services to consumers, particularly those who are low income, disadvantaged, or Indigenous, in regional and remote areas of Australia. The exemption recognises the importance of these services in helping consumers better understand and use financial products and services, and aims to ensure that such services can continue to be provided without an undue regulatory burden. To qualify for the exemption, the financial product advice must be provided as part of the money management service, no fees or charges can be levied on consumers, and service providers must ensure their representatives have the necessary skills, knowledge, and experience. This order extends the limited exemption previously provided to financial counselling agencies under ASIC Class Order [CO 03/1063], and complements the exemption from credit licensing requirements under the National Consumer Credit Protection Act 2009. The application of this class order is limited to the specific circumstances outlined and does not extend to other types of financial product advice or services outside the scope of money management.

Key Provisions

The main operative sections of the ASIC Class Order [CO 11/927] are primarily concerned with providing a limited exemption from the Australian financial services licensing (AFSL) requirements to money management service providers in relation to the provision of financial product advice about basic deposit products, as specified in section 1. This exemption is limited to advice that is provided as part of the broader money management service, ensuring that such advice does not become the core business of the service provider (section 2). The exemption is contingent upon several conditions, including that the advice is provided as part of the money management service, that no fees or charges are payable by the consumer for any aspect of the money management service, and that the service provider ensures its representatives have the requisite skills, knowledge, and experience to provide the advice (section 3). The obligations imposed by the Act on the entities it governs are stringent to ensure the integrity and quality of the services provided. Money management service providers must ensure that any financial product advice provided is strictly in the context of the broader money management service and not as a standalone service (section 3). They must also guarantee that their representatives possess adequate skills, knowledge, and experience to deliver the advice effectively (section 3). Furthermore, the service providers must ensure that no fees or charges are levied on consumers for any part of the money management service, maintaining the non-commercial nature of the services (section 3). These conditions are designed to uphold the quality and purpose of the money management services while ensuring that they remain accessible and beneficial to consumers, particularly those in regional and remote areas. The ASIC Class Order [CO 11/927] also delineates consequences for any breaches of the conditions set forth in the order. While the specific penalties are not detailed in the provided text, breaches of licensing requirements under the Corporations Act 2001 can lead to both civil and criminal penalties. Civil penalties may include fines up to a significant amount, as specified by the Act, while criminal penalties can result in imprisonment. The exact penalties would depend on the nature and severity of the breach, but they are intended to enforce compliance and maintain the regulatory standards set by ASIC. The overarching aim is to ensure that the exemption does not lead to misuse or exploitation, thereby protecting consumers and maintaining the integrity of the financial services ecosystem.

Legal classification tags

Area of Law
Financial Services Law
Instrument
Class Order
Concepts
Regulatory Standards
Exemptions & Exclusions
Reporting & Disclosure Obligations
Catchwords
Financial Product Advice

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.