Checklist · Financial Services Regulation
Client money handling checklist and procedure for an AFS licensee (s 981B accounts)
A procedure and checklist for an AFS licensee that receives client money: identifying it, banking it into a designated ADI account by the next business day, keeping the account clean, reconciling, and controlling withdrawals and payment changes.
- Kind
- Checklist. Steps or checks to work through and tick off.
- Where it applies
- Australia
- AI use
- Red Keep AI out of the decisive steps. A lawyer does the work.
- Law stated as at
- 18 October 2026
- Status
- Maintained. Checked on 18 October 2026 against the 2 authorities it cites, for Australia.
- Version
- 1
- Source
- Written for this library
When to use it
Use when setting up or reviewing a licensee’s client money arrangements, and as the checklist for the people who receive and bank client money. Check the licence conditions and the regulations, which can add requirements.
How AI may be used
AI may help prepare reconciliation working papers and flag unmatched items for a person to investigate, but it must have no access to payment functions, and people decide every deposit, withdrawal and change of payment details.
AI may
- Match receipts in the client money account to client records and list unmatched or misdirected items
- Prepare a draft reconciliation working paper for the responsible person to check
- Flag deposits that may not be client money, or client money banked later than the next business day
AI must not
- Must not have access to initiate, approve or release payments from a client money account
- Must not change client or payee bank details, or accept changed details from an email, without independent verification by a person
- Must not decide whether money is client money or whether a withdrawal is permitted
The lawyer checks
- The account is with an Australian ADI (or a prescribed kind of account) and is designated for the purposes of s 981B
- Only permitted money is paid into the account, and the licensee’s own money is not mixed with it
- Client money is banked on the day of receipt or the next business day, and late banking is investigated and assessed as a possible reportable situation
- Withdrawals are made only as the regulations and the client’s instructions permit, with two-person authorisation
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Financial Services Regulation
- Authorised representative agreement and written authorisation (AFS licensee)
- Reportable situation (breach) report to ASIC: assessment worksheet and completion guide
- Client notice for AI-assisted or digital financial advice
- Hardship notice response letters under the National Credit Code (information request, decision and notice of change)
- Distributor’s design and distribution reports to the issuer: significant dealing notice, complaints report and periodic report
- AFS or credit licensee AI governance policy
- Target market determination (template with statutory checklist)
- Responsible lending unsuitability assessment record (credit providers)
- Internal dispute resolution (IDR) final response letter, with delay notification
All precedents for Financial Services Regulation · Tasks and AI use in this area