Limited Australian Financial Services Licence (Limited AFSL) applicants are likely to face continued delays. That is the message from ASIC’s latest report on licensing; Report 503 Overview of licensing and professional registration applications: Jan to Jun 2016 (Report 503).
From 1 July 2016, accountants are required to hold a Limited AFSL, or must become an authorised representative of an existing Limited AFSL holder, to give advice about acquiring or disposing of an interest in a Self-Managed Superannuation Fund (SMSF) or provide class of product advice on a select variety of financial products.
Report 503 states that the transitional funding they received from the government to assist with the implementation of the changes (i.e. the requirement to hold a Limited AFSL) lapsed on 30 June 2016. There is a significant number of pending Limited AFSL applications still to be assessed. The regulator reports, “Because the transitional period funding has now elapsed, we will assess these limited AFS licence applications out of our existing ongoing resources.” As many existing AFSL applicants will know, the licensing capacity of ASIC was already strained prior to the end of the transitional period for accountants.
The new licensing requirements for Limited AFSL applicants included a three-year transition period ending on 1 July 2016. During this period ASIC reports (through report 503) that it received 899 applications for an AFSL or a Limited AFSL. Of the applications received 203 were approved, 39 were withdrawn, 82 were refused and 617 applications are still pending.
To address the significant number of pending applications for Limited AFSL holders a small number of ASIC staff have been reassigned. These staff will focus specifically on the Limited AFSL applications generated by the new rules around licensing for accountants.
The additional workload without additional funding will result in continuing significant delays for Limited AFSL applicants. However, ASIC advises that all AFSL applicants are likely to be affected, “this current backlog is also affecting the level of service we can provide in the near term to other licence and professional registration applicants.”
ASIC’s target is to assess all applications that were lodged prior to 30 June 2016 before 31 March 2017. However this is subject to the constraints outlined above. ASIC signalled an intention to keep Limited AFSL applicants up to date with their progress and will provide an update every three months.
For further information on obtaining a Limited AFSL, please contact us.