ASIC noted a 40 per cent increase in Australian Financial Service License applications between FY20 and FY21, with most of the increase being attributed to licensing reforms in the insurance handling and debt management services sectors.
Between July 2020 and June 2021 ASIC received 1,883 AFSL and Australian Credit License applications, which it called a “significant increase” on the 1,346 received the previous period.
Of the applications received, ASIC said it approved 458 as opposed to 394 the year before.
“The increase relates mostly to requirements for new persons or entities to hold an AFS or credit licence or additional authorisations,” ASIC explained in its 2021 Licensing and professional registration activities report.
According to ASIC chief operating officer Warren Day, the report outlines the regulator’s functions in ensuring license applicants are “fit and proper, competent, and appropriately licensed or registered for their business activities”.
As of July 1 this year providers of debt management services must be specifically licensed to do, as well as being a member of the Australian Financial Complaints Authority. Transition arrangements mean candidates need only have ASIC accept the lodgement by that date.
As of July 1 insurers, insurance claim handlers and anyone else who handles insurance claims must also hold a specific AFS license to do so, with transition arrangements again in place. Even current AFSL holders are required to update their license to continue servicing claims.