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582 licences pending, ASIC reissues warning

The corporate regulator has revealed as many as 582 applications for licences are pending approval and flagged expected delays with processing as the accountants’ exemption officially ticked over into the new regime on 1 July.

On 30 June, the transitional period for recognised accountants who provide SMSF-related financial advice ended.

On 7 July, ASIC reported that since the start of the transitional period on 1 July 2013, the regulator had received 1146 applications for a limited Australian financial services licence (AFSL).

Of these, 317 have been granted a licence or have been offered a draft licence.

In addition, 582 applications are pending assessment.

Furthermore, 264 applications were withdrawn or returned to applicants because they were incomplete, deficient or missed mandatory information.

Two applications have been referred to an ASIC hearing delegate with a recommendation they be refused.

ASIC deputy chairman Peter Kell warned the industry the provision of unlicensed or unauthorised financial services in relation to financial products, including SMSFs, was a criminal offence and significant penalties applied.

“Accountants and other advisers who have not had their application for a limited AFSL approved by ASIC need to implement contingencies until such time as their applications have been approved by ASIC,” Kell said.

“ASIC received 38 per cent of applications in the last month of the transitional period, and while ASIC is endeavouring to give prompt attention to the assessment of these applications, along with other licence applications that ASIC has on hand and continues to receive for financial services and consumer credit products and services in Australia, we expect that the processing of these applications could take longer than usual.”

On 25 August 2015 and 7 June 2016, ASIC issued public warnings about the consequences of not applying for and obtaining a limited AFSL by 1 July 2016.

ASIC has also previously published guidance and has worked closely with the joint accounting bodies to ensure all affected accountants are clear about what the regulator requires to obtain a limited AFSL.

From 1 July 2016, accountants intending to make recommendations to acquire or dispose of an interest in an SMSF must hold a limited or full AFSL, or become an authorised representative of an Australian financial services licensee.

Recognised accountants who lodged applications with ASIC between 1 July 2013 and 30 June 2016, who were professional practising certificate members of CPA Australia, Chartered Accountants Australia and New Zealand or the Institute of Public Accountants, were only required to demonstrate they had completed the appropriate financial product training.

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