Audit opinion on financial requirementsAudit opinion on financial requirements

Audit opinion on financial requirements

(3) The licensee must lodge with ASIC a report (the audit opinion) by a registered company auditor addressed to the licensee and ASIC for each financial year of the licensee and any other period that ASIC directs in writing that states whether, during any part of the period for which the licensee was authorised to provide a crowd-funding service:
(a) in the auditor’s opinion, the licensee:
  (i) complied with paragraphs (2)(b) and (2)(f) and other financial requirements in conditions on its licence; and
  (ii) had at all times a projection that purports to, and appears on its face to, comply with paragraph (2)(a); and
  (iii) correctly calculated the projection in paragraph (2)(a) on the basis of the assumptions the licensee used for the projection; and
(b) following an examination of the calculations, assumptions and description prepared under paragraph (2)(c) and relied on by the licensee in complying with paragraph (2)(a), the projections prepared under paragraph (2)(a) and the document prepared under paragraph (2)(e), the auditor has no reason to believe that:
  (i) the licensee did not have adequate systems for managing the risk of having insufficient financial resources to comply with paragraph (2)(f) and other financial requirements in conditions on its licence; or

Note: Paragraph 912A(1)(h) requires a licensee (other than a body regulated by APRA that is not the responsible entity of a registered scheme) to have adequate risk management systems.

  (ii) the licensee failed to comply with paragraph (2)(c); or
  (iii) the licensee will not have access when needed to enough financial resources to meet its liabilities over the projected period of at least the next 12 months or, on or before 30 June 2020, 3 months; or
  (iv) the licensee will not hold at all times during the period to which the projection relates in cash, an amount equal to or greater than the current amount the licensee is required to hold in cash under paragraph (2)(f); or
  (v) the assumptions the licensee adopted for its projection in paragraph 2(a) were unreasonable.
(4) The audit opinion must be lodged:
(a) for each financial year of the licensee—with the balance sheet that the licensee is required to lodge under section 989B; and
(b) for any period of time that ASIC directs—by no later than the date ASIC directs in writing the audit opinion to be lodged.
(5) A licensee to whom subsection 912AC(5) (as notionally inserted by ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648) applies is taken to comply with section 912AC (as notionally inserted by ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648) while the licensee complies with this section.
(6) In paragraph (2)(f) and subparagraphs (2)(e)(ii) and (3)(b)(iv), cash includes the following:
(a) current assets valued at the amount of money for which they can be expected to be exchanged within 5 business days;
(b) a commitment to provide money from an Australian ADI or an entity approved by ASIC in writing for the purpose of this paragraph that can be drawn down within 5 business days and when paid is not repayable for at least a month;
held by the licensee and where held as trustee of a trust, includes such an amount if the licensee has no reason to believe that the amount will not be available to meet all of the projected cash outflows of the licensee.
(7) In this section:
cash flow means, in relation to a licensee:
(a) the licensee’s own cash flow; and
(b) if substantially all of the financial services business carried on by the licensee is carried on as trustee of a trust, the cash flow of the trust;
but does not include any cash flow of any other trust.

Note: The definition of cash in subsection (6) does not apply for the purposes of this definition.

clearing participant means a participant (as defined in section 761A in relation to a clearing and settlement facility) in the licensed CS facility operated by ASX Clear Pty Limited (ASX Clear) that reasonably believes it complies with the operating rules of ASX Clear that impose financial requirements, taking into account any waiver of those requirements by ASX Clear (each as in force from time to time).

market participant means a participant (as defined in section 761A in relation to a financial market):

(a) in the licensed financial market operated by ASX Limited that reasonably belives it complies with the rules of the ASIC Market Integrity Rules (ASX Market-Capital) 2014 that impose financial requirements, taking into account any waiver by ASIC (each as in force from time to time); or
(b) in the licensed financial market operated by Chi-X Australia Pty Limited that reasonably believes it complies with the rules of the ASIC Market Integrity Rules (Chi-X Australia Market-Capital) 2014 that impose financial requirements, taking into account any waiver by ASIC (each as in force from time to time).”.

.