30% of AFSL applications are ‘very poor’
The Australian Securities and Investments Commission (ASIC) has just processed its 1000th Australian financial services licence (AFSL), but of the 30-40% of companies applying for full licences, around 30% been rejected on the grounds of “very poor application quality”.
ASIC Director FSR Licensing and Business Operations Pauline Vamos told Sunrise Exchange News that the overall quality of full licences has been “rather disappointing” and the regulator has been returning every application that hasn’t been up to scratch.
“Many of the full applications we’ve received look as though they’ve just been scrapped together and the applicant hasn’t put in much time and effort,” she said. “Basically ASIC has come to the conclusion that it will give priority to those applications that have obviously had a lot of time and effort spent on them.”
Despite the figures Ms Vamos says it’s not too late for smaller businesses to apply for their AFSLs, but larger companies which are still lagging behind with full applications “need to start thinking about a plan B”.
“Don’t panic, because there is help available,” she said. “Don’t be afraid to push the Help button, because we won’t look down on companies that take this pro-active approach.”
Ms Vamos said various financial services groups, including general insurance brokers, financial planners and superannuation trustees, have been particularly slow with their licensing progress. But the regulator isn’t worried about their progress and is expecting most to apply during November.
While many areas of the industry have complained that the licensing progress is complex and legal advice is needed, Ms Vamos says applicants should be able to use the information available to complete applications themselves.
“Licensees need to know and be able to use this information themselves in order to maintain and keep their AFSL in the years to come,” she said. “ASIC has been issuing new AFSL guides to make the process more coherent and useable and there’s no reason why most licensees shouldn’t be able to use it.”