The Australian Securities and Investment Commission is calling on applicants for financial services and credit licenses to go through a checklist of minimum standards prior to applying, to avoid refusal.
ASIC has released an overview of impacts on licensing and registration application-related activities from July 2018 to June 2019. It reveals that only 53 per cent of applications were approved.
Warren Day, executive director, assessment and intelligence at ASIC says: “We are keen to foster a better understanding of the nature of ASIC’s decision-making, what we consider when receiving an application and what is likely to increase the time required to consider an application.”
ASIC says applicants should ensure that they understand the licensing and registration process prior to applying and provide full and frank disclosure during the application process.
Applicants must obtain Australian Financial Complaints Authority (AFCA) membership and obtain or make inquiries about obtaining professional indemnity insurance and advise ASIC of changes to responsible managers and, where the responsible manager is a key person, apply for a licence variation.
In addition, applicants must apply for appropriate authorisations and understand that ASIC may impose additional conditions on a licence. More than half of the applications were approved in a form different in scope to the licence authorisations sought by the applicant
Day says: “We encourage prospective applicants, and licensees intending to apply for variations, to review this report to better inform their applications and understand the regulatory context when applying.”
In 2018/19, there was a decrease in applications with ASIC receiving just 1504 Australian financial services (AFS) and credit licensing applications compared to 1819 the previous year.
ASIC approved 327 new AFS licences and varied 495 AFS licences. Of those, 467 were approved with additional regulatory outcomes.
ASIC enforced additional conditions on AMP Financial Planning’s (AMPFP) licence to provide managed discretionary account (MDA) services.
ASIC says: “The additional conditions were tailored to AMPFP in response to observations from ASIC’s surveillance. The conditions were put in place to ensure that AMPFP adequately monitors and supervises the MDA services provided by its advisers, and that its advisers are adequately trained and meet their best interests obligations.”
In addition, ASIC approved 216 new credit licences and varied 140 credit licences, of which 244 were approved with additional regulatory outcomes.
ASIC cancelled 342 AFS licences, suspended 11 AFS licences, cancelled 546 credit licences and suspended 5 credit licences.
Nine AFS licence applications were refused and a 172 AFS licence applications 154 credit licence applications were voluntarily withdrawn before ASIC made a decision.