THE Australian Securities and Investments Commission (ASIC) has called on planners to apply for the new financial services licence now instead of putting it off to be tackled some time during the transition period.
ASIC national director Ian Johnston says despite a two-year transition period for the Financial Services Reform Act (FSRA) those seeking licences should not wait because the levels of applications and processing involved could exclude planners from practicing. This would occur if ASIC could not process a glut of applications, forcing those planners yet to receive a licence from practicing until their licence had been approved.
Johnston says there had been a rush to get licences under the old regime prior to March 11 to take advantage of the transition period, but a number of applicants did not receive approval in time and will now have to apply for a new licence. In the interim, however, they will not be able to work within the industry.
“In November, we said that January 11 would be an unofficial deadline for those aiming to have an old style licence by March 11, due to the number of applications and the time it takes to process them,” Johnston says.
“Some applicants have been rejected on that basis and will be out of the market until they gain an Australian Financial Services Licence (AFSL). If planners wait until six months before the end of the transition period, they run the same risk because the Government has stated it will not extend the two-year transition period.”
Johnston says the start date for the FSRA on March 11 has taken the heat out of the debate over PS146 because much of the industry realises it will not change and compliance is compulsory.
He also hopes the new regime will shake out some of the less reputable players resulting in fewer complaints but in the short-term, ASIC would not deal harshly with those who unintentionally breach the Act.
“Of course we will actively target those who breach the law openly or choose not to make the necessary changes,” Johnston says.
