The Australian Securities and Investments Commission (ASIC) has introduced an alternative for entities within a corporate group to satisfy the cash needs requirement under Policy Statement 166: Licensing: Financial Requirements, under which entities will no longer have to prepare cashflow predictions on an individual basis.

The requirement asks all Australian financial services licensees to ensure that they have adequate cash to meet their liabilities, taking into account commercial contingencies. Licensees can now meet the cash requirement if an Australian authorised deposit-taking institution provides an enforceable and unqualified financial commitment to pay an unlimited amount to the licensee or to meet the licensee’s liquidity obligations under the licence.

ASIC says it will consider applications on a case-by-case basis.