Procedural Fairness in AFSL Variation Applications: What Rights Does an Applicant Have

Introduction

An Australian Financial Services Licence (AFSL) holder applying to Australian Securities and Investments Commission (ASIC) to vary licence conditions has procedural protections under the Corporations Act 2001 (Cth) (‘Corporations Act‘). Section 914B(9) requires ASIC to give the applicant an opportunity to appear or be represented at a private hearing and make submissions before refusing a licensee-requested variation.

Those protections do not apply automatically to every assessment question or formal information request: if an applicant does not lodge the material requested in a formal ASIC notice on time, the application is taken to be withdrawn, and the hearing protection does not apply. The article distinguishes ASIC’s assessment process, the hearing opportunity and possible Administrative Review Tribunal (ART) review.

Interactive Tool: Check Your Rights & Next Steps for Your AFSL Variation

What Procedural Fairness Rights Apply to AFSL Variation Applications?

The core procedural fairness protection for an AFSL holder seeking to vary its licence conditions is in Section 914B(9) of the Corporations Act. Before ASIC refuses the application, it must give the applicant an opportunity to:

• appear, or be represented, at a private hearing before ASIC; and
• make submissions to ASIC about the proposed refusal.

This gives the applicant a chance to respond to ASIC’s concerns before an adverse decision is made. These protections are triggered by a proposed refusal, not by ASIC’s ordinary assessment questions.

They also do not apply if the application is taken to be withdrawn because the applicant did not lodge the material requested in a formal notice under Section 914B(3) on time. If ASIC does refuse the variation, the applicant may be able to request written reasons and seek merits review by the ART.

Scope of a Licensee-Requested Variation

These protections arise in the context of a licensee-requested variation. Under Section 914A(2)(b) of the Corporations Act, an AFSL holder may apply to ASIC to impose, vary or revoke licence conditions, lodged in the prescribed form with any documents required by the regulations.

The application may concern authorisation conditions (the financial services and products the licensee may provide) or other conditions imposed by ASIC, such as a key person condition or a standard condition in ASIC’s Pro Forma 209. ASIC’s Regulatory Guide 1 (‘RG 1’) states that a variation is likely to be needed when a licensee expands its financial services, products or client types.

ASIC's Assessment of Capacity, Competence & Fit and Proper Persons

Under Section 914B(2) of the Corporations Act, ASIC may refuse the application if the fit and proper person requirement in Section 913BA is not satisfied for the applicant and the licence as proposed to be varied. This does not limit ASIC’s general power to refuse.

ASIC will also consider whether the applicant has the capacity and competence to provide the additional services or products (RG 1.9), reflecting the obligations in Section 912A(1)(d)–(e) of the Corporations Act. Relevant matters include compliance arrangements, financial, human and technological resources, and the knowledge and skills of nominated responsible managers.

The application should therefore explain the proposed changes and include supporting documents showing that the applicant can provide the additional services or products. AFSL application and variation lawyers can assist with preparing that material.

When Must ASIC Offer a Hearing Before Refusing an AFSL Variation?

The Mandatory Opportunity for a Private Hearing Before Refusal

The hearing opportunity in Section 914B(9)(a) of the Corporations Act must be offered before ASIC refuses the application. The hearing takes place in private, and the applicant may appear or be represented. It allows the applicant to address the matters ASIC is considering, including concerns about whether the proposed variation can be approved.

Responding to ASIC’s Concerns Through Written Submissions

Section 914B(9)(b) of the Corporations Act gives the applicant an opportunity to make submissions to ASIC before a refusal decision is made. An applicant may use that opportunity to respond to ASIC’s concerns, including through written submissions and supporting material.

However, written submissions do not replace ASIC’s obligation to offer the private hearing opportunity under Section 914B(9). The response should address the matters raised by ASIC and explain why the variation should be approved.

What Rights Apply When ASIC Requests Additional Information?

Difference Between an Assessment Question & a Formal Section 914B(3) Notice

ASIC may seek more information from a variation applicant in two different ways, and each carries different procedural consequences:

• Ordinary assessment questions: during its assessment, ASIC may ask questions or request further information and supporting material to decide whether the application can be approved, according to RG 1.192. These requests form part of the ordinary assessment process and do not, by themselves, create a right to a hearing.
• Formal Section 914B(3) notices: ASIC may give a written notice requesting specified material in the prescribed form within a stated period. If the applicant does not lodge the material on time, the application is taken to have been withdrawn and the Section 914B(9) hearing opportunity does not apply, under Section 914B(6)–(7) of the Corporations Act.

Neither type of request is the hearing itself. The statutory hearing opportunity arises only when ASIC proposes to refuse the application. Applicants should therefore check whether an ASIC communication is an informal assessment question or a formal Section 914B(3) notice, because only a formal notice carries the risk of deemed withdrawal.

Formal Information Requests Under Section 914B(3)

Under Section 914B(3) of the Corporations Act, ASIC may give a written notice requesting an applicant to lodge specified material in the prescribed form within the period stated in the notice.

Although Section 914B(3) describes the notice as a request, failing to provide the specified material in the prescribed form within the stated period has a statutory consequence: under Section 914B(6), the application is taken to have been withdrawn. The request may seek:

• information about the matters ASIC must consider under the fit and proper person test; or
• an audit report on those fit and proper matters, prepared by a suitably qualified person identified in the notice.

If ASIC proposes to grant the application, the notice may also request a statement confirming whether material information provided with the application has changed. Under Section 914B(4)(a) of the Corporations Act, the request may concern any person covered by Section 913BA.

Response Deadlines & ASIC's Limited Discretion

A notice issued under Section 914B(3) of the Corporations Act specifies the period for lodging the requested information, audit report or statement. Under Section 914B(5) of the Corporations Act, ASIC may withdraw the request or extend the specified period by giving written notice within that period.

The provision gives ASIC discretion to extend the response period; it does not create an automatic right to an extension. Because Section 914B(5) only allows ASIC to extend the period by written notice given within that period, an extension cannot be granted once the deadline has passed. 

Deemed Withdrawal Without the Section 914B(9) Hearing Protection

If an applicant does not lodge the requested information, audit report or statement in the prescribed form within the specified period, Section 914B(6) of the Corporations Act provides that the application is taken to have been withdrawn. Under Section 914B(4)(b) of the Corporations Act, this applies even if the applicant is unable to comply with the request. 

Section 914B(7) of the Corporations Act states that Section 914B(9) of the Corporations Act does not apply to an application taken to have been withdrawn under Section 914B(6) of the Corporations Act. The statutory hearing opportunity before ASIC refuses the application is therefore not available for a deemed withdrawal.

Can an Applicant Challenge ASIC's Refusal of an AFSL Variation?

Requesting Written Reasons for ASIC's Decision

Under Section 268 of the Administrative Review Tribunal Act 2024 (Cth) (‘ART Act’), a person whose interests are affected by a decision that the ART can review may ask the decision-maker, in writing, for a written statement of reasons. Under Section 269(2) of the ART Act, ASIC must generally provide the statement within 28 days after receiving the request, subject to the exceptions in Section 269(6)–(10).

ASIC may refuse the request if reasons have already been given, or if the decision was set out in a document and the request is not made within 28 days after that document was given, as stated by Section 269(7)–(8) of the ART Act.

Written reasons can help clarify the basis for ASIC's decision and inform any further review steps. This post-decision process is separate from the opportunity to appear or make submissions before ASIC refuses a variation under Section 914B(9) of the Corporations Act.

Merits Review by the Administrative Review Tribunal

An eligible ASIC decision may be reviewed by the ART under Part 9.4A of the Corporations Act. Section 1317B allows applications to the ART for review of decisions made by ASIC, subject to the applicable provisions. Under Section 1317D(2), ASIC must also take reasonable steps to notify affected persons of the decision and their review rights, subject to the exception in Section 1317D(3).

Under Section 105 of the ART Act, the ART may:

• affirm ASIC’s decision;
• vary ASIC’s decision; or
• set aside ASIC’s decision and either replace it with its own decision or send the matter back to ASIC for reconsideration.

This merits review occurs after ASIC has made its decision. It is separate from the hearing opportunity under Section 914B(9) of the Corporations Act, which applies before ASIC refuses the variation application.

Review Requirements, Time Limits & Excluded Decisions

Before applying, the applicant should confirm that the ASIC decision is reviewable under Part 9.4A of the Corporations Act. Although Section 1317B generally allows ASIC decisions to be reviewed by the ART, Section 1317C excludes certain decisions from that review.

The application itself can take more than one form. Under Section 34 of the ART Act, it may be made in writing or in any other way allowed by the Tribunal’s practice directions, provided that it includes the information those directions require.

The timing rules, however, are stricter. Under Section 18(1) of the ART Act and Section 5(3) of the Administrative Review Tribunal Rules 2024 (Cth) (‘ART Rules’), an application must generally be lodged within 28 days after the applicant receives written notice of the decision.

Under Section 5(4)–(6) of the ART Rules, different deadlines apply where a statement of reasons is provided, a request for reasons is refused, or an additional statement is provided following an ART decision that the original reasons were inadequate. Section 19 of the ART Act also allows the ART to extend the application period, including after it has expired, if it considers an extension reasonable in the circumstances.

Finally, Section 22(1) of the ART Rules prescribes the standard application fee, subject to annual indexation under Section 33. Following indexation, the standard fee has been $1,195 since 1 July 2026. However, under Sections 22(4) and 29 of the ART Rules, a reduced fee of $100 may apply in limited circumstances, including financial hardship. Section 32 of the ART Rules also allows refunds in specified cases.

How Can AFSL Holders Protect Their Rights During a Variation Application?

The right step depends on where the application is in ASIC’s process. The guidance below follows the four situations an applicant is most likely to face, in the order they usually arise.

If ASIC Sends an Ordinary Information Request

An ordinary request is part of ASIC’s assessment, but the response will shape ASIC’s view of whether the variation can be approved. The applicant should:

• check that the request is not a formal notice under Section 914B(3) of the Corporations Act; if it is, follow the steps for a formal notice below;
• respond within ASIC’s stated timeframe, answering each question directly; and
• support each answer with current records rather than general statements.

ASIC’s Regulatory Guide 1 (RG 1.36–1.38) treats information about business activities, financial services, products, clients, delivery methods, outsourcing and compliance supervision as relevant to its assessment. Keeping the following records up to date allows a quick and accurate response:

• proposed authorisations and financial products;
• processes and procedures for meeting licensee obligations;
• responsible managers’ knowledge and skills;
• organisational competence and available financial, human and technological resources; and
• compliance measures suited to the nature, scale and complexity of the business, which ASIC expects to be documented under RG 1.225.

If ASIC Issues a Formal Section 914B(3) Notice

A formal notice has a fixed deadline, and missing it ends the application without a hearing (Sections 914B(6)–(7)). The applicant should:

• diarise the deadline as soon as the notice arrives;
• identify exactly what is requested: specified information, an audit report by the person named in the notice, or a statement about material changes;
• where an audit report is required, engage the named auditor early;
• lodge the material in the prescribed form within the stated period; and
• if more time may be needed, contact ASIC well before the deadline, as Section 914B(5) does not allow an extension once the period has ended.

If ASIC Proposes to Refuse the Variation

This is the stage at which the hearing and submissions opportunity under Section 914B(9) applies. The applicant should:

• identify each concern ASIC has raised, such as competence, resources, responsible managers or fit and proper persons;
• answer each concern in written submissions with supporting evidence, drawing on the records described above and addressing the specific persons and matters ASIC has identified for any Section 913BA fit and proper concern;
• decide whether to appear at the hearing or be represented; and
• seek advice before the hearing, as AFSL lawyers for ASIC responses and variation matters can help prepare submissions and supporting evidence.

If ASIC Refuses the Variation

Post-decision time limits are short, so the applicant should promptly:

• request a written statement of reasons under Section 268 of the ART Act if none was provided with the decision;
• confirm that the decision is reviewable by the ART, as Section 1317C of the Corporations Act excludes certain decisions;
• note the 28-day time limit that generally applies to ART applications under Section 5 of the ART Rules; and
• use the reasons to identify which of ASIC’s concerns remain unresolved and whether review is worth pursuing.

Conclusion

AFSL variation applications pass through ASIC’s assessment process, where information requests and fit and proper considerations remain separate from the hearing available before refusal. Under Section 914B(6) and (7) of the Corporations Act, failing to comply with a formal notice results in deemed withdrawal without the hearing required by Section 914B(9). By contrast, a refusal may lead to a request for written reasons under Section 268 of the ART Act and, where the decision is reviewable, to merits review by the ART under Part 9.4A and Sections 1317B to 1317D of the Corporations Act.

After an unfavourable decision, contact the AFSL application lawyers at Click Legal to discuss your response, a request for reasons or a possible ART review. Our financial services lawyers provide clear, commercial advice to help AFSL holders address ASIC’s concerns and protect their procedural rights.

Frequently Asked Questions