Australian Securities and Investments Commission v BPS Financial Pty Ltd

This appeal came out of ASIC's case against BPS Financial Pty Ltd over the Qoin product. Qoin was described in the judgment as a digital currency or crypto-asset used through the Qoin Wallet and Qoin Wallet App. The product operated as a facility for non-cash payments. Users could create a wallet, view their Qoin balance and transact using the payment facility. Business operators could register as Qoin merchants and accept Qoin for goods and services, and BPS also made available the Q Shop directory.

The important point is that the licensing issue was not disputed at a high level. The Court recorded that it was common ground that, by issuing the Qoin non-cash payment product, BPS was carrying on a financial services business and would need an AFSL unless an exemption applied. BPS knew this and sought out AFSL holders so it could operate through authorised representative arrangements rather than under its own licence.

BPS first had an arrangement with Billzy Pty Ltd. When that arrangement ended, BPS entered into an agreement with PNI Financial Services Pty Ltd. During the period from 5 November 2020 to 30 August 2021, BPS relied on that PNI arrangement. The primary judge had found that BPS was exempt from the need to hold its own AFSL during that period because it was acting as an authorised representative of PNI. ASIC appealed that part of the decision.

The judgment gives useful detail about the PNI arrangement. PNI held an AFSL that permitted it to provide general financial product advice and to deal in non-cash payment products, including by issuing them. Under the PNI authorised representative agreement, PNI appointed BPS as its authorised representative and specifically authorised BPS to issue the Qoin non-cash payment product and provide general financial product advice about it during the relevant period.

But the agreement also contained features that became important later. The product was defined as the Qoin Wallet, a non-cash payment product. Qoin itself was defined as BPS's digital currency on a blockchain network. The Qoin Wallet was defined as BPS's online platform that stores keys and interacts with blockchain technology so clients can send and receive digital currency and monitor balances. The agreement also said BPS had sought its own legal advice and confirmed that the AFSL terms were sufficient to enable BPS to promote and operate the product.

The extract also records that BPS was responsible for preparing the PDS for the product and ensuring it complied with the Corporations Act and relevant ASIC policy. BPS was responsible for the costs of preparing, issuing and printing the PDS. It was also responsible and liable for the issue of the PDS, including all content, disclosures, images, forecasts and representations in it. The agreement said the licensee bore no liability or responsibility for the content of the PDS.

Those features did not automatically decide the case, but they mattered because they showed how much of the product design, documentation and customer-facing responsibility sat with BPS rather than with PNI.

The legal issue on appeal was whether BPS could rely on the exemption in s 911A(2) of the Corporations Act during the PNI period. ASIC's argument on appeal was more refined than its argument at first instance. ASIC said the exemption contains an essential representative capacity requirement. In practical terms, that meant the exemption only applies where the authorised representative is actually providing the financial services as representative of the AFSL holder.

The Full Court accepted that this representative-capacity question was central and that the answer is fact dependent. The Court said it was not necessary to decide the broader legal question of whether a person can ever be an authorised representative where it is itself the issuer of the financial product. Instead, the appeal could be resolved by asking a narrower question: on the uncontroversial facts, was BPS acting in its capacity as an authorised representative of PNI during the relevant period?

That approach is important for businesses. It means a court may not need to decide every broad legal theory about AFSL provisioning. If the documents and conduct show that the startup or operator was really acting for itself, the arrangement can fail on that narrower basis alone.

The judgment shows that the Court paid close attention to the product documents and to how the Qoin product was actually presented to users. This is one of the most useful parts of the case for business owners because it shows the kinds of evidence a court may rely on when testing whether an authorised representative arrangement is genuine in substance.

First, timing mattered. The Court noted that by around January 2020, and well before BPS approached PNI, BPS had already developed and made available to the public the Qoin Wallet and the Qoin Wallet App. That made it harder to characterise the product as something that was really being issued and operated through PNI in any meaningful representative sense.

Second, the white paper mattered. The extract records that the white paper described plans and progress toward opening a merchant trading ecosystem and referred to the Australian Qoin Wallet as a regulated non-cash payments product approved under an authorised representative number linked to an AFSL. The white paper was part of the public-facing story of the product.

Third, the Qoin Merchant and Consumer Guide mattered. It explained the merchant registration process, how users downloaded the app, how they registered to join Qoin and create a wallet, and how they were taken to linked documents including the Financial Services Guide, Product Disclosure Statement, Terms of Use and Privacy Policy. The guide itself carried BPS copyright notices, reinforcing BPS's central role in the product rollout.

Fourth, the combined FSG/PDS was especially important. The extract says it stated that it provided information about the payment system provided by BPS. It said the FSG was designed to help users decide whether to use services "we provide" and the PDS contained information to help users decide whether to register for and use "our Payment System and services". The words "we", "us" and "our" were defined to mean BPS alone. The Court noted that while the document identified BPS as an authorised representative of the AFSL holder, the language still strongly suggested BPS itself was the entity providing the services and advice.

Fifth, the PDS and related terms pointed to a direct bilateral relationship between BPS and the user. The extract records that BPS charged fees and surcharges, collected and used personal information, could vary the PDS, could exercise rights and remedies under it, and could assign its rights without user consent. The PDS contemplated that by accessing the payment system, the user agreed to be contractually bound by the PDS and the Terms of Use governing use of the payment system.

Finally, the Terms of Use were powerful evidence. The extract says they stated that the Terms of Use, together with the Privacy Policy, PDS and FSG, formed an agreement between the user and BPS. The summary said BPS reserved the right to amend the agreement in relation to the services. The defined terms again treated BPS as the provider and the user as the counterparty. There was no equivalent emphasis on the AFSL holder as the real provider of the service.

Taken together, these documents supported ASIC's position that BPS was not merely acting for PNI. They suggested BPS had developed, documented, branded and operated the product as its own.

The Full Federal Court allowed ASIC's appeal. It held that the exemption in s 911A(2) applies when an authorised representative provides financial services as representative of the AFSL holder, and that the outcome is fact dependent. On the facts referred to in the judgment, BPS was not acting as representative of PNI when issuing the relevant financial product and providing financial services in relation to it.

The Court therefore set aside the relevant first instance order and substituted a declaration that, between 5 November 2020 and 30 August 2021, BPS carried on a financial services business in Australia in contravention of s 911A(1). The declaration said that business involved dealing in a financial product, being the Qoin Wallet, and providing financial product advice in relation to the Qoin Wallet by publishing statements of opinion on its website and in promotional material accessible to the public that were intended to influence decisions about the Qoin Wallet. The declaration also recorded that BPS did not have an AFSL covering the provision of those financial services.

On costs, the Court made no order as to the costs of the appeal, other than that ASIC pay the costs of the amicus curiae.

Businesses should read this case as a substance-over-form decision about AFSL structuring. If your company is trying to launch a payment facility, wallet product or crypto-linked product under another entity's licence, the court may look well beyond the authorised representative agreement. It may ask who really built the product, who is named throughout the customer documents, who controls the platform, who prepares the PDS, who bears responsibility for disclosures, who charges fees, who handles personal information and who the customer is actually contracting with.

This is especially relevant for startups that build first and regularise later. The extract suggests that if the product was already developed and publicly available before the AFSL holder came into the picture, and if the documents continue to present the startup as the provider, it may be difficult to show that the startup is merely acting as representative of the licensee.

It is also a reminder that disclosure documents and terms of use are not just compliance paperwork. They can become central evidence about the true legal and commercial structure of the product. If your FSG, PDS, white paper, onboarding flow and terms all point to your business as the product provider, that may undermine a claim that the AFSL holder is the principal and you are only acting on its behalf.

For practical risk management, businesses using an AFSL provisioning model should test whether the legal structure matches the real operating model. If the product is truly yours in branding, operation and customer relationship, you may need to reconsider whether an authorised representative arrangement is enough.

The appeal decision is Australian Securities and Investments Commission v BPS Financial Pty Ltd [2025] FCAFC 74, decided on 30 May 2025 by the Full Court of the Federal Court of Australia. It was an appeal from Australian Securities and Investments Commission v BPS Financial Pty Ltd [2024] FCA 457. The key period addressed by the substituted declaration was 5 November 2020 to 30 August 2021, being the period when BPS relied on the PNI authorised representative arrangement.

The published judgment is sufficient to identify the appeal outcome, the central legal issue and the practical reasoning relied on by the Court. Some parts of the factual discussion are truncated, so readers should treat this page as a practical explainer of the published appeal decision rather than a substitute for the full judgment.