ASIC v BPS Financial Pty Ltd
ASIC v BPS Financial Pty Ltd [2025] FCAFC 74 — Full Federal Court narrows the path for relying on the ‘authorised representative’ exemption
30 May 2025; Collier, Markovic & Shariff JJ (Full Court of the Federal Court of Australia).
Executive summary
The Full Court allowed ASIC’s appeal against Downes J’s 2024 decision, holding that BPS Financial Pty Ltd (BPS) could not rely on the ‘authorised representative’ exemption in s 911A(2)(a) Corporations Act for a 10‑month period in which it issued and promoted the Qoin Wallet—a non‑cash payment (NCP) facility—because, as a matter of fact and substance, BPS was acting on its own behalf, not “as representative of” the AFSL holder (PNI Financial Services Pty Ltd). The Court therefore declared BPS had contravened s 911A(1) by dealing in a financial product and providing financial product advice between 5 November 2020 and 30 August 2021. Costs: no order, save that ASIC was to pay the costs of the amicus.
Crucially, the Court did not decide whether an authorised representative (AR) can ever be the issuer of a financial product. It emphasised that availability of the exemption turns on whether the service was in fact provided “as representative of” the licensee, a fact‑intensive inquiry.
Background
BPS developed and marketed a system to make non‑cash payments using a crypto‑asset called Qoin via the Qoin Wallet (the NCP facility). Users could view balances and transact with participating merchants. BPS also operated an online directory of “Qoin Merchants”.
ASIC sued in 2022, alleging (among other things) unlicensed conduct and misleading or deceptive conduct. In May 2024, Downes J held that the Qoin Wallet was a “financial product” (an NCP facility) and found misleading conduct on several pleaded representations. However, her Honour accepted that between 5 Nov 2020 and 30 Aug 2021 BPS was an AR of PNI, and (on her findings) could rely on s 911A(2)(a) during that period. ASIC appealed that aspect only. (ASIC Download)
On appeal, BPS filed a submitting notice (not contesting the appeal on the merits); the Court appointed an amicus curiae.
The statutory question
Section 911A(1) requires a person carrying on a financial services business to hold an AFSL. Section 911A(2)(a) provides an exemption where the provider “provides the service as representative of” an AFSL holder. Read with s 911B(1) and the definition of “authorised representative” in s 916A, the Full Court held that the exemption contains an essential “representative capacity” requirement: it applies only when, in fact, the relevant service is provided in that representative capacity (not merely because an appointment exists on paper). (ASIC Download)
The Full Court’s decision and orders
Allowing ASIC’s appeal, the Court set aside Order 3 of the 22 May 2024 orders and declared that between 5 Nov 2020 and 30 Aug 2021 BPS carried on a financial services business in contravention of s 911A(1) by:
(a) dealing in a financial product—the Qoin Wallet; and
(b) providing financial product advice about the Qoin Wallet—
without an AFSL covering those services. No order as to costs, except that ASIC was to pay the amicus’s costs.
Why the exemption failed on the facts
The Court undertook a close, fact‑based inquiry into whether BPS was truly acting “as representative of” PNI when it issued and promoted the Qoin Wallet. It was not. Key factual indicia:
Product development & timing — BPS developed the Qoin NCP product well before any dealings with PNI (development from late 2019; first issue January 2020). PNI had no involvement in development at any time.
Pre‑existing issuance — BPS had already issued the Qoin NCP product (initially under a different AFSL holder’s umbrella) before the PNI appointment; the primary judge had accepted BPS was not exempt for that earlier period.
“AFSL provisioning” — The Court accepted evidence that the true character of the arrangement was “AFSL provisioning”—BPS sought out a licensee to avoid obtaining its own AFSL. (The term was used bluntly by Billzy’s compliance manager and accepted by a BPS principal.)
Documentation control & contracting party — All key documents (White Paper, Guide, combined FSG/PDS, and Terms of Use) were prepared and issued by BPS, many before any PNI involvement; the Terms of Use did not refer to PNI and showed BPS as the contracting counterparty owing/receiving rights and obligations directly vis‑à‑vis users.
Compliance & supervision — PNI’s later compliance steps were “less formal” and occurred after BPS had already produced key documents; in substance, PNI had little to do with issuing the product other than appointing BPS as AR.
Collectively, these facts meant that—even though PNI had appointed BPS as an AR—the financial services were not provided in a representative capacity. The exemption could not be engaged.
What the Court did not decide
The Full Court left open two important questions:
whether a person who issues a financial product can ever act as an AR in that capacity; and
whether AFSL holders must, as a matter of law, be involved in the issuing of products sold or promoted by their ARs.
The outcome was expressly framed as fact‑dependent.
Relationship to the primary judgment
Downes J held in 2024 that the Qoin Wallet was a non‑cash payment facility, and that BPS engaged in misleading or deceptive conduct in various respects when promoting Qoin. Those findings stand; the Full Court’s decision addresses only the availability of the authorised representative exemption during the PNI period. A penalty hearing was foreshadowed following the Full Court’s orders. (ASIC Download, ASIC)
Practical implications (for AFSL holders and ARs)
1) The “representative capacity” test is the gateway.
Appointment under s 916A is not enough. Expect ASIC and courts to probe who really “owns” the product, who contracts with clients, who drafts and controls disclosure, who sets and collects fees, and the degree of day‑to‑day licensee oversight. (ASIC Download)
2) “Licensee‑for‑hire/AFSL provisioning” is a red flag.
Arrangements where an issuer shops for a licensee to badge over its pre‑existing product are at real risk unless the licensee’s substantive involvement is demonstrable. The Court’s acceptance of the “AFSL provisioning” characterisation underscores this.
3) Document architecture matters.
Terms of use, PDS/FSG and marketing should clearly position the licensee as the relevant party where reliance on s 911A(2)(a) is intended. If the AR is the only named counterparty assuming/benefiting from obligations, the exemption is unlikely to apply.
4) Compliance must be real, not nominal.
Licensee oversight (compliance plans, meetings, approvals) should be specific to the product and contemporaneous with its development and issue—not retrospective or “light‑touch”.
5) Indicia to check (drawn from the judgment and early commentary):
Product development & issue: Was the licensee involved?
Nexus: Does the AR’s business have a genuine connection with the licensee’s financial services business?
Disclosure/marketing: Who prepares/issues the documents; do they contemplate a direct relationship with the licensee?
Compliance: Are there product‑specific controls and supervision?
License‑lending risk: Is the arrangement limited to badge‑lending?
Key takeaways
Text matters: The words “provides the service as representative of” in s 911A(2)(a), reinforced by s 911B(1), require actual representative capacity, not just an appointment. (ASIC Download)
Facts matter more: The Court focused on substance over form—who designed, issued, controlled and contracted—when deciding whether BPS acted for PNI.
Open questions remain: The Court left unresolved whether ARs can ever issue products and what level of licensee involvement is legally necessary—both are likely to turn on facts.
Crypto or not, the same rules apply: Wallets/payment facilities can be financial products; structuring around an AFSL requires more than paper‑thin AR arrangements. (ASIC)
Practical checklist (for immediate use)
If you are an AFSL holder who appoints ARs:
Map each AR‑provided service to your AFSL authorisations and responsible managers.
Embed the licensee into the product lifecycle (design, governance, disclosure, pricing, complaints) with written approval gates.
Ensure Terms of Use/PDS/FSG make the licensee a contracting party where appropriate, and allocate rights/obligations accordingly.
Maintain contemporaneous records of supervision (meeting minutes, artifact approvals, QA samples).
Audit for “AFSL provisioning” risk and re‑paper where necessary.
If you are an AR seeking to rely on s 911A(2)(a):
Evidence that you provided the service in your representative capacity—not on your own behalf.
Avoid being the only named contracting party and sole document originator; involve the licensee early.
Align marketing and advice processes so that the licensee’s role is prominent and real.
Where in doubt, obtain your own AFSL or restructure the offering.
(These observations are consistent with the Full Court’s reasoning and early practitioner commentary.)
Citation & materials
Primary judgment (Full Court): ASIC v BPS Financial Pty Ltd [2025] FCAFC 74 (orders and reasons), including Orders, [1]–[4] (intro), [90]–[96] (representative capacity), [106]–[116] (application to facts).
ASIC media release (30 May 2025): concise summary; penalty hearing foreshadowed. (ASIC)
Primary judgment (trial) summary (3 May 2024): Qoin Wallet as NCP; misleading conduct findings; PNI period background. (ASIC Download)
Final word
ASIC v BPS does not shut the door on AR‑issued products, but it narrows the corridor: the exemption is available only where the service is truly provided “as representative of” the licensee. For any “licensee‑for‑hire” models—particularly in fintech and digital assets—form will not trump substance.
This article is a general case note and not legal advice.
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For more information, please contact Gavin McInnes on 07 3367 8681 or gmcinnes@grmlaw.com.au.
The information contained in this article is general in nature and cannot be regarded as anything more than general comment. Readers of this article should not act on the basis of this comment without consulting one of GRM LAW 's legal practitioners who will consider their particular circumstances.
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