Lawyer warns on AFSL application process

Accountants applying for limited AFSLs with ASIC are failing to provide adequate documentation and evidence of training, legal consultancy The Fold has revealed.

Speaking to ifa sister publication SMSF Adviser, The Fold lawyer Jaime Lumsden Kelly said ASIC has cited a number of recurrent mistakes which include failure to undertake the required RG146 training or to obtain the correct professional indemnity insurance.

“[Accountants] understand they need training for SMSFs but they’re not necessarily getting training for the other financial products they are applying for,” said Ms Kelly.

“Accountants should be clear about the authorisations they require for the services they provide and make sure they have completed the required RG146 training for the products they intend to provide advice on,” she said.

Accountants submitting financial accounts for the wrong entity, Ms Kelly said, were another of ASIC’s concerns.

“Material deficiencies” both in the documentation and the information provided by applicants was the main reason provided by ASIC for approving fewer than half the applications in the first half of the year.

While ASIC has not provided an indication of what documents have commonly been missing from applications other than those relating to PI insurance and financial accounts issues, Ms Kelly said the missing documentation from applications is likely to relate to compliance obligations.

“Some of the most common documents that ASIC asks for in addition to the standard suite of documents they require relates to compliance,” she said.

She also said the process will be simpler if accountants familiarise themselves with ongoing AFS licence obligations.

“The application will ask how the accountant proposes to comply with the obligations; to complete it, they need to know what the obligations are and how they propose to manage them,” she said.

“Ideally, their compliance procedures would be in place before they apply, but they certainly need to be ready by the time their AFS licence is issued.”

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