It’s no secret that the Australian Securities and Investments Commission (ASIC) is struggling with their current workload and their ability to assess both Australian Financial Services Licence (AFSL) and Australian Credit Licence (ACL) Applications within expected timeframes. Any hope of having an application approved in an efficient and timely manner is a thing of the past.
ASIC‘s Service Charter published in September 2012, states that ASIC aims to decide whether to grant or vary an AFSL or ACL application within 28 days of receiving a complete application (with a target rate of 70%). However, applications may incur delays where more information is requested to be provided to the applicant or complex issues are raised.
In stark contrast, the current ASIC Service Charter published on its website, states that ASIC now aims to decide to grant or vary an AFSL or ACL application within 60 days of receiving a complete application (with a target rate of 70%). The Service Charter also states that ASIC aims to decide 90% of complete applications within 120 days of receipt, once again noting that applications may incur delays where more information is requested to be provided by the applicant or complex issues are raised.
At the date of publication of this article, ASIC has advised AFSL and ACL applicants to not contact ASIC within 30 days of submitting an AFSL or ACL application as this is the initial period required for assessment of a new application.
In ASIC’s first licensing report published in May 2015 entitled ‘Report 433: Overview of licensing and professional registration applications: July to December 2014’ ASIC noted:
- of the 282 new AFSL applications received between July – December 2014, 87 (31%) were finalised prior to 31 December 2014;
- on 31 December 2014 of the 433 new AFSL applications received throughout the year, 144 (33%) had not been finalised;
- of the 235 new ACL application received between July – December 2014, 167 (71%) were finalised prior to 31 December 2014.
This differs from ASIC’s latest licensing report published in May 2016 entitled ‘Report 478: Overview of licensing and professional registration applications: July to December 2015’, where ASIC noted:
- of the 351 new AFSL applications received throughout the July to December 2015 period, 78 (22%) were approved prior to 31 December 2015;
- on 31 December 2015 of the 516 new AFSL applications received throughout the year, 207 (40%) had not been finalised;
- of the 243 new ACL applications received throughout the July – December 2015 period, 66 (27%) were approved prior to 31 December 2015.
It becomes apparent from ASIC’s own publications above that ASIC has experienced a slip in AFSL and ACL assessment timelines.
The end of the 2015 – 2016 Financial Year also saw the end of the transitional arrangements for accountants applying for a Limited AFSL. Limited AFSL applications are expected to experience serve delays in the assessment of their applications. Of the 1,146 Limited AFSL applications received since the commencement of the transitional period, only 317 (28%) had received been approved. The end of the transitional arrangement period also saw a spike in applications submitted to ASIC, which will only add to ASIC’s licensing assessment strain.
It appears from the above that AFSL and ACL applicants receiving ASIC’s emails advising clients of “increased workloads” and “resourcing constraints” as reasons for the delay in processing AFSL and ACL applications are here to stay.