Practice area

Financial Services Regulation

Define the intended work in Financial Services Regulation (AFSL/ASIC/credit), confirm the applicable requirements and select a task to plan the necessary review.

Key facts

Tasks covered: 33
Tasks with a step-by-step checklist: 17
Local differences: 3 jurisdictions where this area changes

Jurisdiction

Tasks

GreenLawyer reviewYellowClose supervisionRedLawyer-led

Tasks in Financial Services Regulation
Task	How AI is used	Human involvement	What the lawyer must review
Draft a financial-services or credit-licence application narrativeStart this task See suggested levels	Produce a first-draft competency narrative and responsible-manager table from the CVs and organisational chart, mapped to the criteria the lawyer has listed.	YellowClose supervision	Check every competency claim against the actual CV and the current regulator guide Do not lodge a generated proof
Draft an AFSL or ACL application narrative against ASIC RG 105Checklist Start this task See suggested levels	Draft an organisational-competency narrative and responsible-manager table from the CVs and org chart, mapped to RG 105 and the authorisations sought.	YellowClose supervision	Apply RG 105 (June 2022) for competency and RG 1 (revised 16 June 2025) for process Do not use RG 2 or RG 3; they were withdrawn Lodge on the ASIC Regulatory Portal with structured answers Match RM claims to People Proofs and authorisations to each service
Map the FMCA licence needed for the proposed servicesChecklist Start this task See suggested levels	Extract the proposed services and products into a licence-fact sheet.	YellowClose supervision	Map licensing to the Financial Markets Conduct Act 2013 and the FMA Do not use an AFSL, Australian responsible-manager proof or ASIC Form FS01
Build an AI-use gap table against the licence's general obligationsStart this task See suggested levels	Map the client's AI uses to the governance headings the lawyer listed (accountability, risk, consumer harm, transparency, human review, vendors) and mark gaps.	YellowClose supervision	Apply the current licence obligations and regulator letters Do not treat a vendor blog as the standard
Build an AI-use gap table against s 912A, ASIC REP 798 and the APRA AI letterChecklist Start this task See suggested levels	Map AI uses to the six REP 798 domains (accountability, risk, harm, transparency, oversight, vendors) and draft a gap register covering the ASIC and APRA letters named.	YellowClose supervision	Include ASIC's May 2026 open letter (26-092MR) For APRA entities, include APRA's April 2026 AI letter Check each use case's risk rating and s 912A(1)(a) and (1)(h) Check CPS 230 (from 1 July 2025) Look for gaps beyond the tool's list
Draft a reportable-breach assessment and notificationStart this task See suggested levels	The tool writes no part of the notification: the lawyer drafts every answer lodged in ASIC's prescribed form. From the complaint records, system logs, remediation notes and the file notes showing when each fact became known, build a dated chronology, table those facts against the reportable-situation tests and significance factors the lawyer has named, mark every affected-client count, loss figure and stated cause that still has no source, and compare the lawyer's own drafted answers back to those documents and to the fields the current portal form requires.	RedLawyer-led	The lawyer decides whether the incident is a reportable situation and fixes the date the licensee first had reasonable grounds to believe it, because that date starts the reporting clock; the chronology is material for that decision, not the decision. The lawyer then reads their own drafted answers against the source documents, satisfies themselves that the description of cause, client impact and remediation says no more and no less than the file supports, considers whether the same facts are also reportable under the credit licence and to affected clients, and records who authorised lodgement.
Draft a reportable-situation assessment and s 912D notificationChecklist Start this task See suggested levels	From the incident facts, build a timeline and draft s 912D notification against the reportable-situation tests (Corporations Act Pt 7.6 Div 3; NCCP Act equivalents).	RedLawyer-led	Write every substantive sentence yourself; an error may breach s 1308 Keep the s 912D and NCCP s 50A tests apart Check the investigation trigger (60 days, Instrument 2025/289, from 27 June 2025) Check the 30-day reporting clock Check privilege and verify the timeline
Review a sample of advice files against the best-interests stepsStart this task See suggested levels	Check a sample of statements of advice against the best-interests steps the lawyer has listed and produce a gap report with file references.	YellowClose supervision	Confirm the sample is representative Check for oral advice that was never recorded; the tool cannot see it
Review advice files against the Pt 7.7A best-interests stepsChecklist Start this task See suggested levels	Check a sample of statements of advice against the s 961B–s 961H best-interests steps and produce a gap report with file references.	YellowClose supervision	Confirm the sample is representative Check which DBFO Act 2024 (assent 9 July 2024) changes have commenced Test each flagged gap If AI wrote the advice, do an independent substantive check
Review credit files against the responsible-lending or suitability assessmentStart this task See suggested levels	From the loan files, list income and expense evidence, the suitability assessment and gaps against the checklist the lawyer has named.	YellowClose supervision	Confirm which lending regime applies before the review starts Do not let a generated 'not unsuitable' label stand
Review credit files against the NCCP Act not-unsuitable assessmentChecklist Start this task See suggested levels	From the loan files, list income and expense evidence, the not-unsuitable assessment and gaps against ASIC RG 209.	YellowClose supervision	Confirm the regime first; BNPL, consumer leases and SACCs have modified or exempt rules Use the current RG 209 and ASIC's current view on verification Recalculate any remediation figure yourself
Draft or review a product-disclosure document or financial-services guideStart this task See suggested levels	Draft a product-disclosure document or financial-services guide from the product terms, or compare an existing one to the lawyer's heading checklist.	YellowClose supervision	Check fee tables and risk statements against the current prescribed calculations Do not treat a generated cost figure as a disclosure
Draft or review a PDS or FSG against Part 7.9 and ASIC RG 168Checklist Start this task See suggested levels	Draft a PDS or FSG from the product terms (features, risks, costs, cooling-off, disputes), or compare an existing document to RG 168 and RG 175.	YellowClose supervision	Check fees against the prescribed method Make risks product-specific (ASIC's Fiducian greenwashing case, Oct 2025) Cite RG 271 and AFCA limits ($1.263m claims; $6.317m small-business credit, from 1 Jan 2024) Remember errors can create s 1022B liability
Draft or review a target-market determination for a financial productStart this task See suggested levels	Draft a target-market determination from the product terms and distribution channels, or compare an existing one to the product-governance rules named.	YellowClose supervision	Reject an 'everyone' target market Confirm the product and the distribution data actually match the determination
Draft or review a target-market determination under Part 7.8AChecklist Start this task See suggested levels	Produce a first-draft TMD from the product terms and distribution channels, or compare an existing TMD to ASIC RG 274.	YellowClose supervision	Reject an 'everyone' market Make review triggers product-specific and distribution conditions workable and enforceable Apply RG 274 as issued 10 September 2024 Decide yourself whether the product design fits
Map individual accountability for AI and operational riskStart this task See suggested levels	From the org chart and the accountability rules the lawyer names, draft a statement mapping AI and operational-risk functions to named accountable persons.	YellowClose supervision	Confirm the regime applies to this entity Do not lodge a generated accountability statement
Map FAR individual accountability for AI and operational riskChecklist Start this task See suggested levels	From the org chart and the FAR rules named, map AI and operational-risk functions to named accountable persons for an APRA-regulated AFSL holder.	YellowClose supervision	Confirm FAR applies (banks from 15 March 2024; insurers and super from 15 March 2025) Check whether the entity is enhanced Remember weak board AI oversight can breach an accountable person's duties Match the real structure and add APRA's April 2026 findings
Build a production log for a regulator examination or notice to produceStart this task See suggested levels	From the notice and the document set, list potentially responsive items, privilege candidates and a chronology for examination prep.	RedLawyer-led	Decide privilege and relevance yourself Do not treat a generated 'responsive' tag as a production decision
Build a production log for an ASIC s 19 examination or s 30 noticeChecklist Start this task See suggested levels	From the ASIC notice and the document set, list potentially responsive items, privilege candidates and a chronology for s 19 examination prep.	RedLawyer-led	Review every document produced, every representation to ASIC and any undertaking yourself Remember false statements are offences (s 1308 Corporations Act) Use AI for sorting only, checked on a random sample Confirm each privilege claim yourself
Build a breach-register row from the incident factsStart this task See suggested levels	Turn the incident description into a draft register row: date identified, description, significance assessment, notifications and remediation, with gaps marked.	YellowClose supervision	Treat the register as a regulated record Decide dates and significance yourself
Extract product terms, fees and distribution channels into a product-governance tableStart this task See suggested levels	Pull key features, fees, risks and channels from the product documents into a table that can be checked against the target-market determination.	GreenLawyer review	Open each source document Do not treat a generated fee as a product term
Build an authorised-representative or appointed-rep register issues listStart this task See suggested levels	Compare the representative register, appointments and training records and list missing agreements, overdue training and unauthorised product lines.	YellowClose supervision	Confirm appointments against the signed documents Do not treat a register extract as the appointment
Map the client's activities to the authorisations on its licenceStart this task See suggested levels	Extract each authorisation from the licence as issued and each activity from the lawyer's activity list, and draft a coverage matrix keyed to the exact authorisation wording, marking activities with no matching authorisation and authorisations no longer relied on.	GreenLawyer review	The lawyer characterises each activity as a financial service, financial product or credit activity, confirms the authorisation wording against the licence as issued, checks any relief or exemption relied on, and decides whether a variation is needed.
Build the responsible-manager coverage and proof indexStart this task See suggested levels	Draft the coverage matrix and proof index from the responsible managers' CVs, qualification records and the authorisations sought, flagging each authorisation with no responsible manager, each claimed option with no supporting document, and each gap in the experience dates.	GreenLawyer review	The lawyer confirms which of the five options is actually available to each responsible manager, tests the experience claims against verifiable sources, confirms the responsible managers collectively cover every authorisation for the nature, scale and complexity of the business, and confirms the fit-and-proper and criminal-history proofs are current.
Draft the internal dispute resolution response to a complaintStart this task See suggested levels	Assemble the complaint chronology and the findings from the complaint file and, under the lawyer's direction, help draft the response so that it answers each issue raised, states the reasons for the outcome and carries the required AFCA referral information.	YellowClose supervision	The lawyer decides the outcome and any remedy, checks every finding against the file, confirms each issue raised is answered including issues the complainant did not label as such, and confirms the applicable maximum timeframe and the AFCA wording before the response issues.
Build the IDR timeframe and content exception reportStart this task See suggested levels	Extract the receipt date, complaint type, response date and response content from the complaint records into the exception table against the timeframes and content requirements the lawyer sets, and flag every record that misses a requirement or has no response recorded.	GreenLawyer review	The lawyer confirms the complaint type and so the applicable timeframe for each record, opens the underlying file for every flagged record, decides whether a missed timeframe is a reportable situation, and checks whether anything was wrongly kept off the register as not a complaint.
Respond to a hardship notice under the National Credit CodeStart this task See suggested levels	Assemble the hardship notice, the account history and the information the debtor supplied into an assessment sheet, and, under the lawyer's direction, help draft the decision notice so that it carries the reasons and the AFCA information the Code requires.	YellowClose supervision	The lawyer checks the date the notice was received and the resulting statutory due date, confirms whether and when further information was requested, tests the stated reasons against the assessment actually performed, and confirms the notice states the varied terms or the reasons for refusal and the debtor's AFCA rights.
Prepare the accountability statement and accountability map for an accountable personStart this task See suggested levels	Draw the responsibilities out of the position description, delegations and organisational chart into the regulator's statement template and, under the lawyer's direction, help draft the statement text and the map, listing any prescribed key function not yet allocated.	YellowClose supervision	The lawyer confirms who is an accountable person, tests that the statement captures that person's actual responsibilities without gaps or overlaps, confirms every key function is allocated to a named person, and confirms the map reflects the real reporting lines before the person signs.
Set the distributor's reporting schedule and significant-dealing triggersStart this task See suggested levels	Extract the determination's reporting requirements and distribution conditions and, under the lawyer's direction, help draft the reporting schedule and the significant-dealing trigger definitions with the statutory deadlines.	YellowClose supervision	The lawyer checks the schedule against the determination as made and against the statutory reporting obligations, confirms who is a distributor for each channel, settles what counts as a significant dealing for this product, and confirms the record-keeping the obligations require.
Screen and record wholesale or sophisticated client statusStart this task See suggested levels	Extract the test relied on, the figures, the certificate date and the certifier's details from each client file into the classification record, and flag certificates outside the period the regulations allow, figures that do not meet the threshold, and files with no evidence at all.	GreenLawyer review	The lawyer decides which test applies to this client and this product, confirms the certificate is from a qualified accountant and certifies what the regulations require, checks the product value against the actual investment, and decides the consequences for any client wrongly treated as wholesale.
Review a collections or outsourcing arrangement against the licensee's obligationsStart this task See suggested levels	Extract the conduct, contact, complaint-escalation and record-keeping terms from the collection agreement and the collector's own procedures into an issues table against the checklist the lawyer sets, and list each state in which collection activity occurs so the licensing position can be checked.	GreenLawyer review	The lawyer decides whether the collector needs a licence in each state it operates in, tests the contractual controls against the licensee's supervision and conduct obligations, confirms hardship notices and complaints reach the credit provider inside the statutory clocks, and decides what oversight evidence the licensee must retain.
Take a staff account of the events for a complaint or dispute fileStart this task See suggested levels	Index the records the account refers to, cross-reference each of them to the lawyer's topic list, and list the assertions in the account the lawyer has written that have no supporting record yet. The tool writes nothing into the account: no draft, no first draft, no scaffold, no suggested paragraphs and no narrative of what the person did.	RedLawyer-led	The lawyer takes the account from the person, records it in that person's own words, and confirms before it is signed that every assertion is the person's own recollection and is either supported by a record or expressly identified as recollection alone.
Gap-check an AFSL holder's AI governance against ASIC REP 798Checklist Start this task See suggested levelsCommonwealth only	Map the client's AI inventory and policies to REP 798 findings and list gaps.	YellowClose supervision	Decide significance under general obligations and advise.
Prepare a NCCP default notice and hardship-variation checklistChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Extract contract terms, arrears and notices into a dated checklist for the credit provider.	YellowClose supervision	Confirm each statutory period and notice content against the National Credit Code text.
Review a credit-reporting correction request against Privacy Act Part IIIAChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Organise the request, evidence and credit-file entries into a correction-decision table.	YellowClose supervision	Lawyer checks each element against Part IIIA and the CR Code.
Review a licensee's AI-drafted Statement of Advice processChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Map the AI drafting step against best-interests duty safe-harbour steps.	RedLawyer-led	Licensed adviser signs off; s 961B steps cannot be delegated to AI.
Draft a licensee AI governance framework gap table against REP 798Checklist Start this task See suggested levelsWritten for AustraliaAustralia only	Compare the client's AI governance against ASIC's REP 798 questions.	YellowClose supervision	Lawyer settles gaps; check later ASIC updates.
Prepare explainability documentation for an AI fraud or credit modelChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Record model logic, thresholds and escalation for regulator queries.	YellowClose supervision	Lawyer confirms ADM disclosure from 10 Dec 2026.
Update a licensee's privacy notice for AI and automated decisionsChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Draft ADM disclosure text for the privacy policy.	YellowClose supervision	Check against APP 1 and OAIC guidance.
Build a human-in-the-loop sign-off register for AI-generated adviceChecklist Start this task See suggested levelsWritten for AustraliaAustralia only	Design a log capturing reviewer, changes and approval.	YellowClose supervision	Compliance confirms record-keeping obligations.
Review an AFSL holder's AI governance against ASIC REP 798Start this task See suggested levelsWritten for AustraliaAustralia onlySource basis: Area-specific AU source in links	Gap-analyse the licensee's AI governance against ASIC findings.	YellowClose supervision	Lawyer gives the advice.
Review AI-generated financial-advice content for licensing complianceStart this task See suggested levelsWritten for AustraliaAustralia onlySource basis: Area-specific AU source in links	Flag personal-advice and best-interests issues.	RedLawyer-led	Lawyer and compliance review.
Draft an AI risk register for a fund managerStart this task See suggested levelsWritten for AustraliaAustralia onlySource basis: Area-specific AU source in links	List AI uses, risks and controls.	GreenLawyer review	Compliance approves.

Firm-wide obligations

Firm-wide obligations
Obligation	What it covers
Trust accounting & handling client money	Checks that apply across files.
Costs, billing & litigation funding	Checks that apply across files.
Client-facing & access-to-justice AI tools	Checks that apply across files.
Incoming evidence — deepfakes & synthetic documents	Checks that apply across files.
AI decision systems	Checks that apply across files.
Confidentiality & client information	Checks that apply across files.
AML/CTF — the practice as a reporting entity	Checks that apply across files.

What changes in Australia

What changes in Australia
Topic	What changes
Scope	Licensing, conduct, disclosure, enforcement and remediation advice to AFSL and ACL holders and their responsible managers.
Legal sources	Corporations Act 2001 (Cth), ASIC Act 2001 (Cth) and National Consumer Credit Protection Act 2009 (Cth), all frequently amended.
Regulator letters	ASIC REP 798 (October 2024), ASIC open letter 26-092MR (May 2026) and APRA's AI governance letter (April 2026).
Where it goes wrong	An invented citation, outdated position or wrong breach notice given to a client can itself be a reportable situation and give ASIC or APRA new enforcement grounds.

What changes in New Zealand

Known here as: Financial services regulation (FMCA / FMA)

What changes in New Zealand
Topic	What changes
Licensing and conduct	Financial Markets Conduct Act 2013 and the Financial Markets Authority. No AFSL, no RG 209 and no FAR.
Consumer credit	Take any credit rules from the New Zealand credit legislation you have opened, not the NCCP Act.
Climate reporting	Climate-reporting entities are a Part 7A FMCA overlay, not an ASIC climate guide.

What changes in United States

Known here as: Financial services regulation

What changes in United States
Topic	What changes
Regulators	SEC, CFTC and FINRA replace AFSL/ASIC as the licensing frame.
AI claims	SEC press release 2024-36 is the enforcement marker for false AI claims by advisers. Marketing Rule and Form ADV statements about AI must be accurate.

Precedents for this area

Reportable situation (breach) report to ASIC: assessment worksheet and completion guide (Form, AI use Red). Practical guide to deciding whether a reportable situation has arisen, fixing the 30-day clock and preparing every answer for the ASIC Regulatory Portal transaction, with an evidence list and the common traps.
Client notice for AI-assisted or digital financial advice (Notice, AI use Yellow). Plain-English client notice explaining how a licensee uses AI in its advice service, who is responsible, what the tools do and do not do, the type and scope of advice, human oversight, privacy and complaints.
AFS or credit licensee AI governance policy (Policy, AI use Yellow). Board-level policy that sets accountability, an AI inventory, risk rating, pre-deployment testing, human oversight, consumer transparency, vendor controls and incident escalation for a licensee's use of AI, aligned to the licence obligations and ASIC REP 798.
Target market determination (template with statutory checklist) (Other, AI use Yellow). Template target market determination covering product attributes, the target market, consistency reasoning, distribution conditions, review triggers and periods, distributor reporting and significant dealings, with a checklist against Corporations Act s 994B.
Responsible lending unsuitability assessment record (credit providers) (Checklist, AI use Yellow). File record and checklist for a credit provider's assessment that a credit contract or limit increase is not unsuitable: inquiries, verification, the assessment, automated decision tools, the outcome and the consumer's right to a copy.
Internal dispute resolution (IDR) final response letter, with delay notification (Letter, AI use Yellow). IDR response letter that deals with each issue raised, states findings and reasons, sets out the outcome and remedy, and gives AFCA rights and contact details as RG 271 requires, plus a short IDR delay notification.

All precedents for Financial Services Regulation. Signed-in accounts can read the full text.

Related jurisdictions

Australia New Zealand United States