Almost 100 new Australian Financial Services licences were issued by the Australian Securities and Investments Commission in the year to June 30, 2013, with the total number of AFSLs authorised to provide personal advice rising to 3394.
The regulator’s 2013 annual report showed 97 new licences were issued, six licences were cancelled for failure to comply with the obligations, further licensing conditions were imposed on two licensees and roughly 40 AFSLs were handed back.
The financial services industry demonstrated its ability to self-regulate, with 900 breaches reported by AFSLs.
Under the Corporations Act, AFSLs are required to inform ASIC in writing within 10 business days about any significant breach or likely breach of their obligations.
The ASIC report summarised the regulator’s activities in 2013, including the review of 521 pieces of financial advice, the completion of its review of the top 21 to 50 advice licensees and 24 visits to new licensees in order to help them understand and meet their obligations.
During these visits, ASIC questioned licensees about their business models, advice processes, approach to risk and compliance, and implementation of the Future of Financial Advice reforms.
As part of its Priority 1 enforcement actions, called “Confident and informed investors and financial consumers”, ASIC completed 111 litigation and administrative actions in 2012-13, 92 investigations and 12 criminal proceedings, resulting in seven imprisonments.
The annual report also revealed that public reports of misconduct fell by 7 per cent to 11,682 in the 2013 financial year. The regulator was successful in assessing 76 per cent of reports in 28 days, compared to 72 per cent in the same time frame in 2012.
Complaints related to financial service providers and retail investing accounted for 42 per cent of total reports. Credit providers received the highest number of consumer reports followed by reports of misconduct from superannuation, insurance and financial planning businesses.
