Unprepared accountants need licence application assistance

The Fold Legal (The Fold) claims accountants are still not adequately prepared when applying for an Australian Financial Services Licence (AFSL) with the Australian Securities and Investments Commission (ASIC).

The firm claims the approval of 27 out of 62 applications for a limited AFSL lodged with ASIC prior to July 2014 indicates a lack of understanding of compliance procedures and licence obligations among accountants.

Correlating ASIC's identification of material deficiencies in documentation and provision of information by applicants as one of the reasons for rejecting AFSL applications, with accountants being ill-equipped and applying for AFSL before they are ready.

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The Fold's senior lawyer, Jaime Lumsden Kelly said "It's clear that rushing the process, or applying before you are really ready increases the risk of a poor-quality application and consequently rejection by ASIC" adding, "If accountants familiarise themselves with the ongoing AFSL obligations, things become simpler."

Lumsden Kelly also suggested accountants need to be more specific on their requirements when applying for a licence and should consult relevant specialists prior to applying, stating "Accountants should be clear about the authorisations they require for the services they provide and make sure they have completed the required RG146 training for the products they intend to provide advice on."

"It is also important to check the adequacy of their professional indemnity insurance and consult a specialist broker if they are uncertain."

"The application will ask how the accountant proposes to comply with the obligations. To complete it, they need to know what the obligations are and how they propose to manage them. Ideally, their compliance procedures would be in place before they apply; but they certainly need to be ready by the time their AFS licence is issued."




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