Module Application
- Does your organisation engage in or intend to engage in financial investment activities such as: *Financial advisory *Financial product and securities issuing *Trading in market-traded and over-the-counter (OTC) securities, derivatives, commodities and foreign exchange *Securities lending *Funds management *Hedge funds *Investment banking *Private banking *Private equity *Margin lending *Asset-based finance and leasing
- Does your organisation hold or intend to obtain an Australian Financial Services Licence (AFSL)?
- Does your organisation have systems and processes in place to manage and monitor compliance with its financial investment obligations?
Module Scope
The FINANCIAL INVESTMENT module informs the financial services licensee undertaking institutional investment of their legislated legal obligations. The module also demonstrates effective practical advice and assistance to the organisation to implement procedures and processes that will ensure compliance and regulatory accountability throughout all levels of the institutional investment entity.
The investment industry in Australia encompasses a broad range of financial services sectors, including;
- Financial advisory;
- Financial product and securities issuing;
- Trading in market-traded and over-the-counter (OTC) securities, derivatives, commodities and foreign exchange;
- Securities lending;
- Funds management;
- Hedge funds;
- Investment banking;
- Private banking;
- Private equity;
- Margin lending; and
- Asset-based finance and leasing.
The broad scope of the FINANCIAL INVESTMENT module is to provide answers to these questions;
- What are our legal obligations?
- From where are our legal obligations derived?
- How can we ensure that we are complying with our legal obligations? and
- What are the consequences if we are not complying with our legal obligations?
This FINANCIAL INVESTMENT module covers different aspects of financial investment and funds management. It includes the requirements for responsible entities of registered investment schemes and operators of unregistered managed investment schemes. In particular, the module covers the following requirements for responsible entities:
- Registration and operation of an investment scheme
- Compliance and oversight
- Risk management
- Product disclosure
- Improved disclosure and advertising
Various types of investment funds and schemes are covered, including:
- Australian passport funds
- Time -sharing schemes
- Charitable schemes
- Strata schemes
- Litigation funding schemes
The FINANCIAL INVESTMENT module also covers the requirements in relation to fundraising and securities, takeovers, derivatives (OTC derivatives and non-centrally cleared derivatives), foreign investment and product offering, prohibited conducts and relevant market rules, such as the ASIC Securities Market Integrity Rules.
In addition, the module provides requirements for certain special entities such as clearing and settlement facility licensees and licensed trustee companies, and for special markets such as carbon markets.
Significant consequences can apply to financial services licensees and their authorised representatives found to have breached or not complied with their legal obligations. These consequences vary considerably depending on the nature and extent of the breach or failure. The FINANCIAL INVESTMENT module covers specific consequences in detail. They can include monetary penalties, disciplinary measures and even terms of imprisonment for individuals found to have committed serious criminal offences.
The FINANCIAL INVESTMENT module does not cover the rights or entitlements of individuals who have suffered damages or losses due to breaches of obligations by financial services licensees undertaking financial investment. The module does not cover the process that an entity or an individual would follow to report or seek compensation for the breach or their loss.