It’s seven months since the Financial Services Reform Act came into effect, and the Australian Securities and Investments Commission (ASIC) is entering the second stage of a campaign to get rid of unlicensed financial services companies.

The regulator has taken its time to deal with mavericks that Executive Director FSR Ian Johnston says jeopardise consumers and the industry’s reputation.

The campaign’s first phase focused on transition to the new regime. The second focuses on finding and acting against operators with no licence, including those that didn’t need one before.

By the end of last year ASIC had found 996 “old law” licensees that hadn’t made a move to get an Australian financial services licence.

Mr Johnston says most of them have restructured to operate under a related entity’s licence, become authorised representatives or quit the industry.

A few are unaccounted for and may be the subject of legal action over the next six months. During that period ASIC will conduct compliance checks of companies that seem to be operating without a licence.

The penalty for running an unlicensed financial services business is a $22,000 fine or two years in jail, or both.