ASIC toughens licensing process
Australian financial services licensees (AFSLs) and Australian credit licensees lodging licence applications to the corporate regulator can expect a more rigorous approach to assessing applications but guidelines on the exact requirements are not available yet, according to The Fold Legal.
Senior consultant, Sonia Cruz, wrote in a blog that the Australian Securities and Investments Commission (ASIC) would reject applications after the initial check if any component was missing in the licensing applications, which could take up to four weeks. This would then need to be resubmitted, causing significant delays in having applications assessed.
"So before lodging your application, carefully check all the material you submit in support of your application to ensure everything required by ASIC's AFS licensing kits is included," Cruz wrote.
She also said that since 2013, ASIC had been able to reject applications if it believed the applicant could contravene the financial or credit services laws in the future.
Applicants can also expect ASIC to conduct rigorous background checks to look for past misconduct, particularly deliberate or wilful disregard of financial or credit services laws.
However, Cruz noted that while ASIC said it May it would update the AFS Licensing Kit (RG 1-3) to specify its new approach to assessing applicants on if they contravened the law, it had not yet released any guidance.
ASIC's timeframe was currently 60 days for simple applications but Cruz said it could take four months.
"And the situation seems unlikely to improve. In ASIC's 2016—17 Corporate Plan, only four per cent of the total budget of $400 million has been allocated to licensing and professional registrations," Cruz said.
ASIC may also ask for materials applicants may use under the licence include a financial services guide or statements of advice.
"It's difficult to predict what they might ask for, so it's advisable to have your operating procedures and disclosure documents ready when applying for your licence," Cruz said.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
