The number of applications for new Australian Financial Services Licenses approved by ASIC has declined over the past financial year, the latest figures from the regulator have revealed.
Report 797: Licensing and professional registration activities: 2024 update released on Friday shows that in FY24 ASIC received 570 applications for new AFSLs and approved 280 (a 49 per cent approval rate). In FY23 the regulator received 633 applications for new AFSLs and approved 332 (a 52 per cent approval rate).
There were 239 AFSLs cancelled or suspended in FY24, a 9 per cent decreased compared to FY23.
However, the reduced approved AFSL figures come as ASIC improved the overall satisfaction with application process which also includes credit licences, liquidators and auditors.
The regulator said it is also continuing to seek feedback on its application process and has currently achieved a 90 per cent positive rating with 61 per cent ‘very satisfied’ and 29 per cent ‘satisfied’ with how ASIC dealt with their licence and registration application.
“Survey feedback also referred to an increase in the speed of assessments, an acknowledgement of the expertise of the licensing analysts and praise for the communication throughout the process,” the report said.
ASIC aims to decide 70 per cent of licensee applications within 150 days of receiving a complete application and within 240 days in 90 per cent of cases.
Broken down between ‘new’ and ‘variation’ applications, 80 per cent of new AFSL applications and 75 per cent of AFSL variation applications were decided within 150 days, while 90 per cent of new AFSL applications and 89 per cent of AFSL variation applications within 240 days.
| Speed of licence application approval | ||||
| FY23 | FY24 | |||
| New | Variation | New | Variation | |
| Done within 150 days | 75 per cent | 66 per cent | 80 per cent | 75 per cent |
| Done within 240 days | 88 per cent | 83 per cent | 90 per cent | 89 per cent |
To approve a licensee registration ASIC will assess the applicant via its responsible managers is appropriately competent, along with the applicant’s controllers, officers and nominated responsible managers, are fit and proper; the applicant has financial, technological and human adequate resources; the regulator has no reason to believe the applicant is at risk of contravening the obligations of the license.
When ASIC is likely to refuse an application, the applicant has the option to attend a hearing and make submissions as to why a licence or registration should be granted.
Some 48 per cent of approved AFSL applications were subject to at least one additional “regulatory outcome” with 419 additional regulatory outcomes achieved on approved applications.
Regulatory outcomes are additional licensee conditions that including modifying or imposing additional conditions on the licensee authorisations or responsible manager.
Breakdown of regulatory outcomes for AFSLs
Source: ASIC
Alternatively, the regulator may still refuse a particular licence authorisation or reject the nominated responsible because they are satisfied the nominee has the “necessary competence” to deliver the relevant financial service.
The data comes as ASIC is in the midst of trialling its new AFSL registration portal with limited numbers, ahead of a full lunch anticipated for early next year.
ASIC commenced the pilot programme in August, with most applications still being handled by the current system with the new one expected to launch for 1Q25.
The new portal aims to provide a “user-friendly and streamlined experience” by pre-filling information already known to ASIC, and only presenting questions relevant to each applicant’s application.
