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Accountants are preparing “poor-quality” limited AFSL applications leading to a high rejection rate by ASIC, says a financial services law firm.
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Accountants told to take time with licensing applications
11 November 2014
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According to The Fold Legal, ASIC approved only 27 of the 62 applications for a limited AFSL lodged before July 2014. Senior lawyer Jaime Lumsden Kelly said this was down to poor quality applications.
“Material deficiencies in both the documentation and the information provided by applicants were the main reasons given by ASIC for approving fewer than half of the limited Australian Financial Services (AFS) licence applications lodged by accountants in the first half of the year.”
“So it’s clear that rushing the process, or applying before you are really ready increases the risk of a poor-quality application and consequently rejection by ASIC,” Ms Lumsden Kelly said.
“Accountants should be clear about the authorisations they require for the services they provide and make sure they have completed the required RG146 training for the products they intend to provide advice on,” she added.
Speaking to AccountantsDaily’s sister publication SMSF Adviser, Ms Lumsden Kelly said ASIC has cited recurrent mistakes, including the failure of accountants to undertake correct training and obtain the correct personal indemnity insurance.
“[Accountants] understand they need training for SMSFs but they’re not necessarily getting training for the other financial products they are applying for,” said Ms Lumsden Kelly.
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“Accountants should be clear about the authorisations they require for the services they provide and make sure they have completed the required RG146 training for the products they intend to provide advice on."
Ms Lumsden Kelly also said the process will be simpler if accountants familiarise themselves with ongoing AFSL obligations.
“The application will ask how the accountant proposes to comply with the obligations; to complete it, they need to know what the obligations are and how they propose to manage them,” she said.
“Ideally, their compliance procedures would be in place before they apply, but they certainly need to be ready by the time their AFS licence is issued.”
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