ASIC is once again calling for reforms – this time requesting there be more "rigorous" tests for those wishing to be granted a licence by the corporate regulator.
Addressing the parliamentary joint committee on corporations and financial services on Friday, ASIC deputy chairman Peter Kell said that by implementing tougher check points in the application process, this will help weed out unfit candidates earlier.
"The barriers of entry to getting a licence, in our view, have not been robust enough. And then on the other hand, the ability to take away a licence is more difficult than it should be, which is the opposite of the combination that you would wish," he said.
"We believe that having more rigorous tests before a licence is granted can create an ability to not back a licence if we do not think the firm is equipped to satisfy the requirements.
"It would allow us, to in effect, knock some of the poor players out at the entry gate rather than down the track."
However, others would argue that the current system in place is not exactly a smooth process.
Speaking to ifa, financial services lawyer Sophie Gerber, who is a director at Sophie Grace Compliance and Legal, said it has been taking longer than usual lately to receive an AFSL.
She said she has about 20 to 25 clients still waiting for ASIC to approve their licences.
"That's 20 to 25 businesses that could be up and running," Ms Gerber said. "These people want to set up their business but [ASIC is] basically stopping them."
"It's not about how much money [the applicants waiting] are losing. It's about how much capital they're currently sitting on which could be injected into the economy if they were licensed to spend it."
Further, Ms Gerber said while she is not against ASIC increasing the barriers to entry, she hopes the regulator will begin to articulate the extra requirements earlier in the process.
"They come back to us with requirements after weeks or months of the application being with them," she said.
"If we were able to tell clients upfront what ASIC is looking for then they could make the relevant preparations. But when you've been waiting for months for a response, and get asked questions we couldn't help the clients prepare for in advance, is really difficult."
Ms Gerber added that the AFSLs she is after relate to "funds management, issuing small credit contracts, out-of-the-box style businesses". The AFSLs for independent financial planners move along quickly, she said.
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