Businesses providing financial products and services, or providing credit, are required to obtain and maintain a licence issued by ASIC. The Taskforce positions on reform seek to strengthen ASIC’s licensing powers by ensuring that it may take appropriate action to refuse to grant, or suspend or cancel a licence where applicants or existing licensees (or those who control them) are not assessed by ASIC as being fit and proper to be licensees.
The need to strengthen ASIC’s powers over licensing of financial sector entities was also flagged in the final report of the Financial System Inquiry (FSI). The FSI considered that strengthened licensing powers would enable ASIC to deal more effectively with poor behaviour and misconduct.
A full list of the Taskforce’s positions are below:
- Position 1: ASIC should be able to take licensing action if it is not satisfied controllers are fit and proper when a licence is applied for or on a change of control.
- Position 2: Introduce a statutory obligation to notify change of control within 10 business days of control passing and impose penalties for failure to notify.
- Position 3: Align the assessment requirements for AFS licence applications with the enhanced credit licence requirements [the enhanced credit license requirements adopted in 2010].
- Position 4: ASIC to be empowered to cancel or suspend a licence if the licensee fails to commence business within six months.
- Position 5: Align consequences for making false or misleading statements in documents provided to ASIC in the AFS and credit contexts.
- Position 6: Making a false or misleading statement in a licence application should be a specific basis for refusing to grant the licence.
- Position 7: Applicants should be required to confirm that there have been no material changes to information given in the application before the licence is granted.
The taskforce invites all interested parties to make a submission on the positions outlined in this paper by 26 July 2017.
Address written submissions to:
ASIC Enforcement Review
Financial System Division
PARKES ACT 2600