... Financial requirements and Pro Forma 209 Australian financial services licence conditions, responsible entities will have new requirements for net tangible asset capital, liquidity and reporting. Financial statement presentation . ASIC's new financial requirements for issuers of retail OTC derivatives significantly raise the bar for them, and could push some players out of the market all together. The AAT will now need to treat the deferred tax asset as excluded from Opus's NTA. All AFS licensees except Share and print this article. ASIC decided to cancel Opus's license in August 2010, after the company failed to rectify an ongoing breach of the NTA … For example: The following table contains a comparison of the requirements applying up to 1 November 2012 and those applying from 1 November 2012 onwards: Composition of NTA In addition to increasing the minimum NTA requirements and removing the $5 million cap for some entities, ASIC has also made some adjustments to how NTA is calculated. Revised AFSL financial requirements: making custody safer Clayton Utz Australia December 7 2012 ... (an incidental provider) hold a required level of net tangible assets (NTA… AFSL change of control form lodgment fee – increase from $0 to $4,400; and ACL application fee (body corporate) – increase from $1,075 to $5,700. Regulation Impact Statement: Financial requirements for custodial or depository service providers 12 Net tangible assets (NTA) is a measure of financial strength currently used in the financial requirements applicable to certain AFS licensees—for example, responsible entities, IDPS operators, custodians, issuers of margin Category of AFS licensee Base level financial requirements (Section B) Additional requirements ( Sections C–D and Appendices 1 –9) Solvency and positive net assets requirement Cash needs requirement Audit requirement NTA requirement SLF requirement ASLF requirement . Breach reporting by AFS licensees Important notice: AFS licensees are now required to submit breach reports to us via the ASIC Regulatory Portal.The portal will replace existing submission channels. Louise McCoach and Matthew Daley run through what the new rules are, and their likely effect on the industry, before going through the to-do list to prepare for the first 31 January 2013 deadline. Similar to right-of-use assets, ASIC’s announcement does not impact presentation D. If an AFSL is not held, it is possible for the ‘fund originator’ or ‘investment manager’ to outsource the activities for which an AFSL is required. If you don’t hold an AFSL… consideration when preparing your NTA calculation for AFSL requirements and confirmation from ASIC may be appropriate if you plan to include contract assets in your NTA calculations. NTA requirements are imposed on AFSLs offering managed funds. The net tangible assets requirement has been significantly increased. As the financial condition requirements applicable to AFSL holders are on an ‘at all time’ basis, compliance needs to be considered from the commencement of the financial year to which the standard first applied (even if ASIC were to subsequently change a licensee’s conditions to allow ROU to be counted in NTA calculations). Table 2: What requirements apply? ... Net tangible asset (NTA) capital requirements. We note that the Government will consult on the introduction of an industry funding model in line with best practice requirements. ASIC found Ingot was in breach of the financial requirements of its Australian financial services licence (AFSL) as a result of inappropriately including funds held as collateral against derivative contracts to meet the 'cash and cash equivalents' aspect of its net tangible assets (NTA) requirement. THE QUICK ANSWER: An AFSL is required for the provision of the financial services to be undertaken by a business. Arguably the most significant ASIC proposal contained in CP 194 and the focus of this article, is the introduction of the requirement that providers of "incidental custodial or depository services" (an incidental provider) hold a required level of net tangible assets (NTA).

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