Posted November 12, 2020
Posted By Meghann Cannon
Tricks and traps for AFSL applicants – the 2020 ASIC licensing update
Prepared by Jodi Ainsworth
A new ASIC update on its licensing and registration activities for 2020 highlights the importance of thorough preparation of AFSL applications prior to lodgement, and the need for timely and accurate follow-up responses to ASIC.
AFSL applicants must provide information to satisfy ASIC that a wide range of its key people meet the relatively new ‘fit and proper person’ test. This is in addition to the vetting of Responsible Managers and their previous experience, and ensuring all information is documented correctly and in full. ASIC has reiterated that it takes the issue of provision of false or misleading information very seriously, and now must refuse an application on this ground or where there has been a material omission in the information provided to it.
Further, AFSL applicants should be fully prepared to provide further information about their application on ASIC’s request, and be aware that ASIC can withdraw an application where the information is not provided within ASIC’s time frame. Such a withdrawal happened for the first time in April 2020, with the applicant forfeiting their $2,047 application fee.
This update also serves as a reminder of the requirement to commence operations within 6 months of being granted an AFSL. If an AFSL holder doesn’t do this, they must notify ASIC. It seems that ASIC will take into account the impact of COVID-19 and will not cancel a licence at this stage unless there are specific concerns. Again, this situation requires timely correspondence with ASIC.
Thorough preparation in line with the current legal requirements (including the COVID-19 allowances) and communication with ASIC is critical to a successful AFSL application outcome, and this is all part of Kit’s AFSL application package.
ASIC’s update is available at https://download.asic.gov.au/media/5849142/rep671-published-11-november-2020.pdf.