With less than 12 months until the Financial Services Reform Act comes into play, more than three-quarters of Australia’s financial service providers haven’t even thought about applying for licences. Since the release of this information, the Australian Securities and Investments Commission (ASIC) has jumped into damage control introducing a “countdown clock” on their website to remind providers how much time they have left to comply.   

Government statistics show that ASIC has so far only granted 355 licences, with about 6000 applications still to come.

ASIC Executive Director Ian Johnston is taking a hard-line approach as rumours circulate that the compliance period for the regime will be extended. “If you want to operate beyond 10 March 2004, the message is clear. We cannot give a general extension to the FSR transition period.”

Parliamentary Secretary to the Treasurer Senator Ian Campbell supports ASIC’s tough approach to the regime.

“There can be no excuses for anyone not lodging their application well inside the deadline,” Senator Campbell said. “If they miss the cut-off they will be out of business – it’s as simple as that.”

Mr Johnston says the majority of the industry is yet to consider their transition into the new regime, although there has been an increase in application requests.

He says ASIC will only grant extensions of the compliance period in “exceptional individual circumstances” and companies should comply as quickly as possible in order to avoid ASIC’s planned targeted surveillance visits on late applicants and those who just made it over the line.

Mr Johnston says ASIC’s priorities during the final 12 months of the transition will be to assess streamlining and composite applications that have all the required attachments; and applications for relief that address the requirements of Policy Statement 51.

ASIC says it will not be giving priority to variations to pre-FSR and AFS licences and licence applications from new industry participants that require full assessment. And relief applications that are “poor quality” will be at the back of the queue, too.

ASIC will continue conducting verification visits to a percentage of applicants throughout the rest of the transition period. “Our targeted compliance visits will focus on applicants that may be a compliance risk, including late lodgers,” Mr Johnston said.