ASIC: no post-FSR mercy for non-licensees

TheAustralian Securities and Investments Commission(ASIC) has warned it will crack down on any organisation continuing to operate post-March 10 without a valid Australian Financial Services Licence (AFSL) after revealing it is yet to receive an estimated 900 applications.

The peak regulator is likely to be tough in dealing with any groups failing to meet the deadline with ASIC executive director of financial services regulation, Ian Johnston stressing the regulator has spent the past two year insisting businesses lodge their applications early.

“During the two-year transition period of the Financial Services Reform Act (FSRA), ASIC has consistently warned financial services businesses to lodge their licence applications as early as possible. We have provided extensive guidance to help industry make the transition to the new licensing regime,” Johnston says.

The outstanding application figure of 900 comes despite ASIC downwardly revising its application estimates to take into account “structural changes within the industry”.

ASIC is now contacting each potential applicant, and informing them that as the assessment process is relatively simple for these applicants, any application lodged before the end of January will be assessed before the March deadline.

“To date, ASIC has issued over 2500 licences, with more than 1000 applications currently being assessed. We expect that the vast majority of these will receive their licence by the March 10 2004 deadline,” Johnston says.

It is an offence to carry on a financial services business without a licence, an offence punishable by a fine of $22,000 or imprisonment for two years, or both, ASIC warns.

After March 10, ASIC will conduct surveillance of businesses illegally operating without a licence or otherwise not complying with financial services laws, with it emphasizing that compliance is intended to protect the interests of consumers and uphold the integrity of the industry.