ASIC ‘tougher’ on AFSL applications, says lawyer

In a recent blog, The Fold Legal senior consultant Sonia Cruz said ASIC has become tougher on granting licenses, and is refusing to accept applications for lodgement if certain items are missing.

Further, the regulator is now looking for evidence that could indicate an applicant’s likelihood to contravene financial services laws.

This includes scrutinising social media accounts such as LinkedIn to assess character and verify past experience, she said. ASIC also checks with former employers and assesses company records to very financial information.

In addition, the regulator communicates with external agencies, such as other local or international regulators, for information about compliance with analogous obligations in other regimes, Ms Cruz said.

“ASIC told us in May this year that it would revise the AFS Licensing Kit (RG 1- 3) to include details of the information it will request to assess whether applicants are likely to contravene their licence obligations,” she said.

“It suggested that it might require submissions, but gave no indication of what form these might take. Unfortunately, even though ASIC appears to be taking a different approach to assessing applications, the foreshadowed guidance hasn’t yet materialised.

“This means that, because you don’t know what you’re likely to be asked for, it’s hard to prepare in advance.”

What is known, however, is that AFSL applications are taking longer than ever to be assessed, Ms Cruz said.

“So apply early, and be prepared to wait. ASIC’s current KPI is 60 days for simple applications, but in our experience, it’s more likely to be well over 4 months,” she said.

“And the situation seems unlikely to improve. In ASIC’s 2016-17 corporate plan, only 4 per cent of the total budget of $400 million has been allocated to licensing and professional registrations.”