Oz Financial Services Providers Must Be Licensed

by Mary Swire, for LawAndTax-News.com, Hong Kong

13 March 2003

The Australian Securities and Investments Commission (ASIC) has warned financial services providers that in order to conduct business after 10th March 2004 they must apply to obtain their Australian Financial Services (AFS) licence, to comply with the Financial Services Reform Act.

"If you want to operate beyond 10 March 2004, the message is clear. You need to apply for your AFS licence soon," ASIC director of financial services regulation Ian Johnston says.

Johnson says that although many in the industry have begun their applications, most are yet to make the transition to the new regime. "We cannot give a general extension to the Financial Services Reform (FSR) transition period. We can only grant an extension in exceptional individual circumstances," Johnston says.

"We have commenced verification visits on applicants to ensure documentation they have referred to in their application is in place. Although it's early days, these random visits have so far shown good levels of compliance," Johnston says.

"We are also planning our targeted compliance visits focusing on applicants that may be a compliance risk including late lodgers. This puts an end to the belief that applicants in early are more likely to receive a compliance visit," he says.

The regulator says financial service provider groups who apply now will avoid ASIC's planned surveillance campaign on late applicants. It says it will not give priority to licence applications from new industry participants requiring full assessment and to variations of pre-FSR and AFS licences.

Support for disclosure obligations under the FSRA is high, according to a Securities Institute survey, which shows only 13 per cent of advisers think they are too onerous and 11 per cent think they should be more strict.

Securities Institute chief executive Brian Salter says. "It reveals that the industry accepts the wake up call about past failures and is improving advisers' practical skills, particularly in the areas of disclosure and communication."

Recommended