At a liaison meeting between ASIC and professional licensing consultants in March this year, we were warned not to expect a return to the good ol’ days of 2 month turnarounds on AFS and credit licence applications – ever! It seems that ASIC considers 6 months to be an acceptable minimum. Here’s why.
According to ASIC, licence application assessment is a critical gatekeeper function in the battle against bad apples entering the industry. So its Licensing Division has been directed to intensify their scrutiny of applications.
In addition to the increased workload that this entails, the Division has been tasked with licensing 3 new sectors (accountants, platform based MDA providers and crowd sourced funding intermediaries). And at the same time, insufficient funding has been allocated to the Division.
As a result, staff numbers have been reduced from 35 to 25. This chronic under resourcing doesn’t look like being solved any time soon.
ASIC has extended its service charter
For many years, ASIC claimed to assess licence applications and variations within 28 days. This increased to 60 days in c. 2016.
But a 60 day timeframe hasn’t been achieved for a considerable time as illustrated by the table below, showing the time taken to assess applications for new or varied licences in the first 7 months of FY 2018.
|Application Type||25% within||50% within||70% within||90% within|
|AFS||36 days||67 days||126 days||253 days|
|Credit||35 days||59 days||105 days||253 days|
Indeed, in January 2018, ASIC only managed to finalise 115 of 685 existing and 90 new applications, i.e. the backlog was only reduced by 25!
Bowing to the inevitable, ASIC has altered its service level targets for assessing AFS and credit licence applications. We have now been conditioned to expect 70% of applications to be assessed within 150 days and 90% within 240 days.
That’s 5-9 months, give or take.
Applications will take longer to assess if they raise complex or new policy issues, or if ASIC is not given all the information they need.
This is making it more difficult for businesses launching new products and services to get to market. Indeed, some innovative businesses are exploring launching in other jurisdictions.
Some changes are on the cards which sound good in theory, but only time will tell whether sustainable improvement will be achieved.
An improved online licence application process
ASIC is developing a new online licence application, which aims to better “triage” applications. While we don’t know when it will be launched, we can tell you that:
The objective is a ‘one read’ review and analysis by ASIC to reduce double handling and the elapsed time currently taken up by multiple requests for additional information.
Enhanced examination of Responsible Manager capability
ASIC will more closely scrutinise representations made about Responsible Managers. This will include the following:
While ASIC’s efforts to simplify the licensing process are welcome, we predict that the increased scrutiny and complexity may well further protract and complicate the licensing process. Except for the simplest of applications, applicants are likely to continue to need professional assistance.
Author: Sónia Cruz