ASIC today published its fourth report on its approach to and assessment of licence applications.
Report 503 Overview of licensing and professional registration applications: Jan to Jun 2016 (REP 503) sets out recent regulatory outcomes achieved by ASIC in relation to Australian financial services (AFS) applications, Australian credit licence applications, liquidator registration applications, company auditor and approved SMSF auditor registration applications.
The report is part of ASIC’s ongoing commitment to greater transparency about our regulatory activities and sets out the volume and outcomes from our licensing and registration assessments during this half year. ASIC’s first licensing activity report was published in May 2015 (refer: 15-118MR).
ASIC Deputy Chairman Peter Kell said, ‘As well as reporting on legitimate licensing activity, this report highlights some of the regulatory actions ASIC has taken when applicants and their advisers attempt to mislead us in their licence applications.
This issue was highlighted in some recent AAT decisions (refer: 16-284MR ASIC cancels IMS FX Services Pty Ltd’s Australian financial services licence and 16-364MR AAT affirms ASIC’s decision to refuse an application Clemente Group Holdings Pty Ltd for a derivatives/market maker licence).
30 June 2016 also marked the end of the three-year limited licence transition arrangements. Around 40% of applicants left it to the last month of that 36-month transition to apply. As a consequence ASIC has advised applicants to expect delays in their licence assessment and approval (refer: 16-220MR Transition period for recognised accountants providing SMSF related financial product advice has ended).
ASIC continues to provide assistance to participants seeking to provide financial and credit services in the fintech sector through our Innovation Hub and has been expanded to include engagement with ‘regtech’ participants (those with businesses designed to assist financial and credit service licensees comply with their regulatory obligations). Also, in light of the responses to ASIC Consultation Paper 260 Further measures to facilitate innovation in financial services (refer: 16-185MR) and consultation with the Government, ASIC will provide some further licensing guidance and ‘sandbox’ relief while ensuring that investors and consumers safeguards are not compromised.
For 1 January to 30 June 2016:
- ASIC assessed approximately 2,850 applications ( 52% higher than the previous six months), with 60% relating to a new licence application, 25% relating to variations to existing licence and the remaining 15% related to professional registration (liquidators and auditors);
- Of the total number of applications assessed, 67% of these related to an Australian financial services (AFS) licence and 18% related to an Australian credit licence;
- 41% of all applications assessed during this period were approved;
- 78% of those approved were in a form other than as requested by the applicant (with 76% of these relating to an AFS licence and 68% related to a credit licence);
- Nine AFS licences were suspended, 143 AFS licences were cancelled, three credit licenses were suspended and 153 credit licences were cancelled; and
- ASIC assessed 440 applications for professional registration as liquidators and auditors.
Licensing liaison meetings
ASIC now intends to hold its next licensing liaison meetings in Sydney and Melbourne in the first quarter of 2017. We are also looking at a technological solution for those located in other centres and we will be publishing an agenda for these meetings on our website and invitations will be sent out closer to the time of the meetings.
To register your interest in attending these liaison meetings, please click here.