More ASIC guidelines as industry struggles

TheAustralian Securities and Investments Commission(ASIC) has released a guide on complying with Policy Statement 166 (PS166) after inadequate licence applications and requests for assistance from the industry.

The guide details how Australian Financial Services Licence (AFSL) applicants, accountants, licensees and auditors can meet their PS166 obligations with the March 11 2004 deadline approaching.

ASIC director of financial services regulation (licensing) Pauline Vamos says the regulator has noted many applicants fail to adequately describe how they are intending to comply with the PS 166 requirements.

“We’ve issued the guide at this time to ensure that applicants do not delay in making their AFSL application because they are unsure about how to comply,” she says.

Vamos says the first step for applicants is to identify the financial obligations relevant to their financial services business.

“The majority of licensees with less complex businesses will generally need to demonstrate solvency, positive net assets and cash budgeting. Licensees who also hold client funds will need to meet the surplus liquid funds requirement,” she says.

More specialised requirements apply to responsible entities which need to hold net tangible assets, licensees who owe money to clients, and people who deal in foreign exchange contracts.

At the same time as the PS166 guide, ASIC has outlined decisions made in some recent applications for relief from the licensing, conduct and disclosure provisions of the Financial Services Reform Act (FSRA).

ASIC director of financial services regulation (legal and technical) Pamela McAlister says the overview provides guidance on the circumstances where ASIC will consider granting relief.

However, ASIC warns that applicants should not assume they will be provided with relief in the future in similar cases as each application depends on unique facts.