ASIC cancels 120 financial services licenses in H2 2014

Australian Securities & Investments Commission (ASIC) earlier today published its first licensing activity report – the document covers the period from July 1, 2014 to December 31, 2014 (or the second half of last year). The document is particularly interesting, given speculation that ASIC has gotten more reluctant to process new retail Forex brokers’ applications for Australian financial services (AFS) licenses.

First, let’s take a look at what happened to existing holders of the coveted AFS licenses. In the second half of 2014, the regulator cancelled 120 AFS licenses. The bulk of these (104 licenses) were cancelled at the request of the licensee. The main reason cited for such requests is the halt of conducting a financial services business as a result of retirement or the sale of a firm’s client list/business.

The remainder (16 licenses) were cancelled due to action initiated by ASIC. The main reason the regulator mentions is that the licensee has entered into external administration or has been deregistered by ASIC.

And now let’s explore what’s happening on the front with new applications.

In the July-December 2014 period, ASIC received a total of 289 applications for a new AFS license. The majority of these applications (60%) were approved – 174 licenses were granted.

However, only a small portion of these licenses (14.5%) were granted as the applicant requested. This means that in the majority of the cases, ASIC imposed additional regulatory requirements. This often translates into the appointment of a compliance expert or extra demands regarding key management personnel at the financial services provider.


To download the full ASIC report, click here.

Read Also: