ASIC Regulatory Guide 166 AFS Licensing: Financial Requirements (Australia) rg166-b-solvency-net-assets: Be solvent at all times and keep total assets above total liabilities, as shown in the balance sheet and in the required projections

The first base level requirement is that the licensee can pay all its debts as they fall due (solvency) and has total assets that exceed total liabilities (positive net assets), both on the last balance sheet and in the cash flow projection and balance sheet projection the cash needs requirement calls for. The Corporations Act's director duties on insolvent trading sit behind the requirement. A licensee that cannot meet it must notify ASIC under its breach reporting obligations and cease providing financial services where the condition demands.