Preparing to apply for a limited licence from the Australian Securities and Investments Commission (ASIC) should be taking accountants as long if not longer than the licence application process itself, according to The Fold Legal (The Fold).
“Material deficiencies in both the documentation and the information provided by applicants were the main reasons given by ASIC for approving fewer than half of the limited Australian Financial Services (AFS) licence applications lodged by accountants in the first half of the year,” says The Fold’s Senior Lawyer, Jaime Lumsden Kelly, “So it’s clear that rushing the process, or applying before you are really ready increases the risk of a poor-quality application and consequently rejection by ASIC.”
ASIC approved only 27 of the 62 applications for a limited AFS licence lodged before July 2014.
“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 says. “It is also important to check the adequacy of their professional indemnity insurance and consult a specialist broker if they are uncertain.”
The licence application process becomes much more streamlined if the financial information supplied to ASIC is correct and relates to the entity applying for the licence, according to Ms Lumsden Kelly. “If accountants familiarise themselves with the ongoing AFS licence obligations, things become simpler,” she says. “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. 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.”
The Fold has released an AFS Licensee Manual, which provides guidance and procedures on these obligations.
Click here for all the resources needed to help decide which licence is required and how to apply for a Limited AFS licence – including a DIY Limited AFS Licensing Kit.
