Broker-Dealers
We support broker/dealers establishing or expanding dealing services in Australia—defining the right AFSL scope, selecting the most practical pathway (apply or acquire), and building the operating controls needed to launch and scale with confidence.
Broker-dealer businesses require AFSL authorizations to deal in financial products,
which may include securities, derivatives, foreign exchange contracts and managed investment scheme
interests. The specific authorizations required depend on the products dealt in, the capacity in which
dealing occurs (as principal, as agent, or by arrangement), and whether the dealing is with retail clients,
wholesale clients, or both.
AFSL Advisory has particular depth in advising broker-dealer and market maker businesses. We
understand the operational and regulatory complexities of dealing models, including the interplay
between dealing authorisations and the product intervention powers exercised by ASIC, the
requirements for adequate financial resources, client money and property handling obligations, and the
governance and risk management expectations applicable to market-facing businesses.
How we support broker/dealers
Clear scope, complete documentation, and controls that work in practice
Broker/dealer models vary widely—execution-only vs advisory distribution, wholesale vs retail, agency vs principal, and different product sets. We help you translate your dealing model into a clear AFSL scope and an operating framework that is implementable from day one.
Common scenarios
OTC Derivatives and CFD-Specific Compliance Considerations
Businesses offering over-the-counter derivatives and contracts for difference to retail clients operate in one of the most heavily scrutinized segments of the Australian financial services market. ASIC has exercised its product intervention powers under Part 7.9A of the Corporations Act to impose leverage limits, margin close-out protections, negative balance protections, and restrictions on certain inducements for retail CFD products. Compliance with these requirements demands precise operational controls, clear client documentation, and ongoing monitoring of product terms against the applicable intervention order conditions. We assist OTC derivatives businesses to design compliance frameworks that address the specific requirements of the retail CFD regime, and to maintain those frameworks as ASIC’s product intervention posture evolves.
Margin FX Dealing Requirements
Margin foreign exchange dealing involves specific AFSL authorisation requirements and operational obligations that differ in important respects from other OTC derivatives products. The client money obligations applicable to margin FX businesses, the financial requirements under RG 166, and the disclosure obligations under the product disclosure statement regime each require careful implementation. We assist margin FX businesses to obtain the correct AFSL authorisations, design client money handling arrangements that comply with Part 7.8 of the Corporations Act, and build compliance frameworks that reflect the specific risk profile of leveraged FX dealing.
ASIC Product Intervention Orders and Their Operational Implications
ASIC’s product intervention powers allow it to impose conditions or restrictions on financial products where it is satisfied that a product has resulted in, or is likely to result in, significant detriment to retail clients. Product intervention orders currently apply to retail OTC derivatives including CFDs and binary options. Compliance with these orders requires precise operational implementation — including system-level controls over leverage ratios, margin close-out mechanisms, and client categorisation processes. We assist affected businesses to understand the full operational implications of applicable product intervention orders, implement the required controls, and maintain compliance as ASIC reviews and extends those orders over time.
Best Execution Obligations Dealing and Market-Making Authorisations
Licensees that deal in financial products on behalf of clients are subject to best execution obligations requiring them to take reasonable steps to obtain the best outcome for the client in the circumstances. The content of these obligations depends on the products dealt in, the execution venues available, and whether the client is retail or wholesale. We assist broker-dealer businesses to design best execution policies that reflect their actual execution model, implement order routing and execution quality monitoring procedures, and maintain documentation that demonstrates compliance with best execution obligations in the event of regulatory scrutiny
Client Money and Property Obligations Under Part 7.8
The client money and property obligations in Part 7.8 of the Corporations Act impose specific requirements on licensees that receive money or property from clients in connection with financial services. These obligations include requirements to pay client money into a designated trust account, to maintain records of client money transactions, and to reconcile client money balances regularly. For OTC derivatives businesses, the interaction between the client money obligations and the use of client funds as margin is a significant compliance consideration. We assist broker-dealer businesses to design client money handling frameworks that comply with Part 7.8, implement reconciliation procedures, and address the specific client money considerations applicable to their dealing model.
Trade Surveillance and Market Conduct Obligations
Businesses that deal in securities or derivatives on licensed markets are subject to market conduct obligations under the ASIC Market Integrity Rules, including prohibitions on market manipulation, false trading, and other forms of market misconduct. Effective compliance with these obligations requires a trade surveillance program that monitors trading activity for patterns indicative of misconduct and escalates alerts for investigation and resolution. We assist broker-dealer businesses to design trade surveillance frameworks proportionate to their trading volumes and product mix, implement escalation and investigation procedures, and maintain records that demonstrate active monitoring of market conduct obligations.
Responsible Manager Requirements for Dealing Businesses
Dealing businesses face specific challenges in satisfying the responsible manager competency requirements under RG 105. The experience required to demonstrate competence in dealing in derivatives, foreign exchange contracts, or securities is highly specific, and ASIC scrutinises responsible manager evidence carefully in applications involving dealing authorisations. We assess proposed responsible managers against the RG 105 competency standards before lodgement, identify gaps, and work with applicants to assemble evidence that is complete, consistent and defensible in the context of a dealing business application.
International entrants
For international broker-dealers seeking to establish Australian
operations, the removal of certain foreign financial service provider exemptions under the Corporations
Amendment (Foreign Financial Service Providers) Regulations has made obtaining an AFSL the primary
pathway to servicing Australian clients. AFSL Advisory assists international broker-dealers to assess their
licensing requirements, evaluate whether application or acquisition is the more appropriate pathway,
and design a compliance framework that integrates with their existing global operations.