This fact sheet provides an overview of the legal, operational and business issues relevant to the financial and insurance services industry. This industry includes businesses that:
- are involved in financial transactions such as buying, selling, creating or changing ownership of financial assets.
- take deposits, issue securities, provide insurance and superannuation products, or regulate financial activities.
Typical businesses in this industry include banks and credit unions, superannuation providers, insurance companies, investment advisors, stockbrokers and wealth management firms.
As well as the information in this factsheet, you should check our general business information for additional regulations and obligations relevant to your business. For further advice and assistance, contact your accountant, solicitor or business advisor.
See our topics on this page for detailed information on the financial and insurance services industry:
Industry research is an important part of planning for your business. It may uncover economic and industry trends, establish or improve your business and help you keep pace with your industry.
Key government sources for industry specific statistics on the financial and insurance services industry include:
- Australian Bureau of Statistics (ABS)
The ABS provides information such as industry performance indicators, employment statistics and consumer spending. All these figures are available on the Finance topic and Service industry sections of the ABS website.
- Australian Prudential Regulation Authority (APRA)
APRA provides statistics on the financial performance of APRA-regulated industries and companies.
- Australian Securities and Investments Commission (ASIC)
ASIC publishes a reference checking directory for financial services organisations, as well as Codes of practice for the financial services industry.
- Reserve Bank of Australia (RBA)
The RBA provides information on the main types of financial institutions as well as other financial statistics.
Key legislation & initiatives
Legislation often plays a large part in how you run your business, so it’s important to be aware of the laws that apply to your industry. In the financial and insurance services industry, government regulation ensures the safety, reliability and integrity of your finance or insurance business. Its role is to supervise financial markets and enforce regulations when necessary. Key legislation for the financial and insurance services industry includes:
Companies overseen by the Australian Prudential Regulation Authority (APRA) should also consult the Legislation that applies to APRA activities including:
For a list of laws administered by the Australian Securities and Investments Commission (ASIC), visit the ASIC website.
Your business may also need to meet industry codes of practice. These are set by industry associations to establish service standards. Codes of practice are usually voluntary. A list of codes in the financial services industry is available on the ASIC website.
You can have your say on government policy and regulation affecting the future of your industry by registering on the Business consultation website.
Licences & permits
Licences and permits specific to the financial and insurance services industry are generally administered by federal government agencies. These licences and permits are related to:
- general insurance
- credit provision
- registered schemes
- custodial or deposit services
- providing financial products.
You may need to apply for an Australian Financial Services (AFS) licence if your business:
- provides financial product advice
- deals in a financial product
- makes a market for a financial product
- operates a registered scheme
- provides traditional trustee company services
- provides a custodial or depository scheme.
A credit licence may also be needed if you want to engage in credit activities.
Search the Australian Business Licence and Information Service (ABLIS) website to find out what licences and permits you need for your industry.
If you employ staff, you need to comply with Australia’s national workplace laws and the specific requirements in your industry:
Finance & tax
Generally there is no financial assistance from government for businesses in the financial and insurance services industry. In times of market uncertainty however, the Australian Government may provide special assistance. Currently, this includes:
- Goods and Services Tax (GST)
It’s important to know your GST obligations to ensure you are providing your services at the correct price and that you’re registered with the Australian Taxation Office (ATO) to ensure you can claim your GST credits. Visit the ATO GST Financial services page for details specific to your industry.
- Australian Reinsurance Pool Corporation (ARPC)
The ARPC administers the terrorism reinsurance scheme, which provides primary insurers with reinsurance for commercial property and business interruption losses caused by terrorism.
- Medical indemnity insurance package
This package supports medical practitioners and insurers, making the medical indemnity market more sustainable.
- Financial Claims Scheme
This scheme protects depositors of authorised deposit-taking institutions and customers of general insurance companies from potential losses cause by the failure of company.
Levies & charges
Levies and charges are generally used to fund activities that benefit the industry or economy as a whole such as consumer protection and regulation of the industry. Levies in the financial and insurance services industry are generally applied to:
Grants for businesses in the financial and insurance services industry are generally only available for improving business productivity and innovation rather than providing financial support. Instead of industry-specific support, your business may be eligible for a variety of grants and assistance open to businesses from all industries. This can include grants for:
- improving management skills and knowledge
- getting your business online
- getting business advice.
Search Grants & Assistance to find more grants and assistance programs for the financial and insurance services industry.
Workplace Health & Safety (WHS)
Businesses in the financial and insurance services industry are largely covered by standard WHS regulations. If your business is located in an office building, your health and safety strategy should include measures to prevent office-based injuries.
For some businesses that employ staff or contractors who aren’t office-based, such as insurance investigators or sales staff, there are some other WHS requirements that may be relevant to your business including:
- standards for protective clothing and equipment
- standards for occupational safety signage
- prevention of burns from hot liquids, surfaces or steam
- driving safety
- electrical safety.
Need help understanding your WHS obligations? Try these government resources:
As well as compulsory insurance such as workers compensation, there are also a number of specific insurance options for businesses in the financial and insurance services industry.
Insurance options vary depending on your business type and exposure to risk, but can include insurance for:
- General liability – cover against legal liability for personal injury, property damage and advertising liability.
- Superannuation trustees liability – covers against actual or alleged breaches of trust or law, neglect or misleading conduct with respect to a super fund.
- Investment managers insurance (IMI) – covers breach of duty, directors and officers liability claims and fraud.
- Commercial crime – covers theft, extortion and fraud from internal employees, external sources or a combination of the two. This insurance can also cover costs associated with data restoration, investigation costs and lost interest.
- Professional indemnity insurance – covers potential damages relating to negligence or breach of duty created by an error, omission or act during the delivery of professional services.
Some banks and insurance companies may also be able to register for the Australian Government Financial Claims Scheme, which protects depositors of authorised deposit-taking institutions and customers of general insurance companies from potential losses caused by the failure of the company.
Visit Insurance and workers' compensation for details on general insurance options for business.
Intellectual Property (IP)
As well as Trade marks, there are other IP rights that may be relevant to financial and insurance services businesses:
- Patents - protecting a method, device or system that is new and inventive can be an effective way of protecting your IP.
- Confidentiality / trade secrets – can be used to stop employees from revealing secret knowledge during and after their employment.
IP Australia is the federal government agency responsible for granting rights in patents, trade marks and designs. Visit the IP Australia website to find out more about your IP options.
Industry training can be an important part of your business survival. New farming methods or strategies can often help to ease the environmental impacts on your business. Need some help getting started?
Businesses in the financial and insurance services industry are generally not impacted by the natural environment. The exception to this is insurers that provide coverage for damage caused by climate events such as floods and fires. However, the industry can have a positive impact by promoting sustainable development through lending, investment, internal policies and social responsibility.
All businesses can make environmentally conscious decisions regardless of their exposure to the environment. This can include:
- carbon offsetting
- office waste reduction
Visit our Environmental management topic for advice on how you can manage your impact on the environment.
Key government organisations & websites
The key federal government agencies and websites relevant to the financial and insurance services industry include:
The key state government agencies relevant to the financial and insurance services industry include:
Business advisors can be a valuable tool when establishing and developing your business in your industry. Search Advisory Services to find one near you.
You may also wish to consult with an industry association or group for more information and advice on your industry.
© Commonwealth of Australia 2016.
This content was first published on www.business.gov.au