AFSL (Australian Financial Services Licence)
The licence, issued and regulated by ASIC, that a business must hold to provide financial services such as holding or dealing in client funds in Australia.
Definition
The licence, issued and regulated by ASIC, that a business must hold to provide financial services such as holding or dealing in client funds in Australia. BuildFair does not hold customer funds and so is not required to hold its own AFSL; the funds-holding side runs through its banking partner Kobble, which operates under AFSL 545391 (Yondr Money Pty Ltd).
Why it matters
When a platform handles money, the question of who holds the financial services licence determines who carries the regulatory obligations around those funds. It is also a claim that has to be made accurately: stating that the wrong entity holds a licence would be a misleading financial statement. For BuildFair, the position is that the banking partner Kobble holds and deals with the funds under AFSL 545391 (Yondr Money Pty Ltd), and BuildFair, which does not hold customer funds, is not required to hold its own AFSL.
How it works in practice
ASIC issues and supervises AFSLs. A licensee must meet conduct, competence, and financial requirements and is subject to ongoing obligations around how it provides financial services and handles client money.
On BuildFair, the regulated funds-holding sits with the banking partner Kobble under AFSL 545391 (Yondr Money Pty Ltd). BuildFair authorises releases according to the project rules but does not hold the cash, which is why it is not required to hold its own AFSL.
Common misconceptions
Every fintech holds its own AFSL
Not necessarily. A business that does not hold customer funds may rely on a licensed banking partner for the regulated activity rather than holding its own licence.
An AFSL guarantees the funds against loss
An AFSL is a licence to provide financial services under regulatory conditions. It is not a government guarantee that money cannot be lost.
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