ASIC Regulatory Guide 166 AFS Licensing: Financial Requirements (Australia) rg166-c-surplus-liquid-funds: Hold surplus liquid funds of at least fifty thousand dollars plus five per cent of adjusted liabilities over one million up to ten million, and the lower marginal rate above, where the licensee holds more than one hundred thousand dollars of client money or property

What does rg166-c-surplus-liquid-funds require?

A licensee that holds client money or property (other than money held under a regulated trust account arrangement or where the liabilities to clients are adequately secured) with a total value above one hundred thousand dollars must hold surplus liquid funds, meaning adjusted assets less adjusted liabilities measured on the liquid basis the definitions set, of at least fifty thousand dollars plus five per cent of adjusted liabilities between one million and ten million dollars plus one half of one per cent of adjusted liabilities above ten million dollars, calculated on the licensee's own balance sheet excluding client money and property. The requirement reflects the internationally accepted principle that a firm holding client assets should carry its own liquid resources beyond the base level. The licensee calculates it at least when its balance sheet changes materially and demonstrates it in the annual audit.