ASIC Updates 2023-24 Licensing and Professional Registration: Crypto, BNPL, and More in Focus
The Australian Securities and Investments Commission (ASIC) has released its 2023-24 update on licensing and professional registration activities, providing key insights into its gatekeeping role in maintaining market integrity. As detailed in Report 797: Licensing and Professional Registration Activities (REP 797), ASIC processed over 1,500 licensing applications in the past financial year, while also introducing improvements aimed at simplifying the application process.
ASIC Commissioner Alan Kirkland highlighted the importance of these activities in shaping a well-regulated financial market, noting, “ASIC’s licensing and professional registration function plays a key gatekeeping role by ensuring new licensees and registered professionals meet the necessary thresholds.”
Licensing by the Numbers: A Year in Review
Between July 2023 and June 2024, ASIC was at the forefront of managing licensing in Australia’s complex financial landscape. Here are some of the key takeaways from the report:
- ASIC received 1,531 applications for licensing and professional registration.
- It finalized 1,246 applications for new or varied Australian Financial Services (AFS) and credit licenses.
- 280 new AFS licenses and 143 credit licenses were approved, alongside 495 variations for existing licenses.
- Additionally, ASIC registered 113 company auditors, 45 self-managed superannuation fund (SMSF) auditors, and 17 liquidators.
- It also canceled or suspended 239 AFS licenses and 204 credit licenses in cases of non-compliance.
Importantly, 80% of new AFS license applications and 75% of variation applications were decided within a 150-day window, reflecting ASIC’s commitment to timely decision-making.
Emerging Sectors Under ASIC’s Lens: Crypto, BNPL, and Payment Systems
As part of the report, ASIC shed light on new and evolving licensing concerns, particularly in the fast-growing fields of cryptocurrency, Buy Now Pay Later (BNPL) services, and payment systems. These sectors have seen rapid development, and ASIC is stepping up efforts to ensure that market participants meet regulatory requirements.
ASIC’s focus on these areas aligns with its broader mission to protect consumers and maintain stability in markets that are experiencing high growth and innovation. The regulator’s careful scrutiny in these sectors will be critical as more companies seek to operate within Australia’s financial services industry.
Streamlining the Licensing Process: A New Digital Portal
In an effort to make the licensing process more efficient and user-friendly, ASIC is introducing a new digital portal for AFS licensees and applicants. The portal aims to simplify the application and variation process, allowing for smoother interactions between industry participants and the regulator.
Commissioner Kirkland explained, “We’re also building a new digital portal for AFS licensees and applicants to make it easier and more efficient to apply for, maintain, and vary their license.” This development is part of ASIC’s broader push to modernize its systems and improve communication with stakeholders.
Enforcement Actions and Cancellations
ASIC continued its rigorous enforcement actions throughout the year, canceling or suspending licenses in cases where businesses failed to comply with regulatory standards. High-profile actions included the cancellation of licenses for several contracts for differences (CFD) brokers, underscoring the regulator’s tough stance on non-compliance.
In addition to license cancellations, 44 professional registration applications were withdrawn, and two applications were outright refused, further demonstrating ASIC’s diligence in maintaining the credibility of its licensing regime.
Transparency and Guidance for Financial Professionals
ASIC’s annual licensing report serves as a critical tool for financial professionals, providing clear guidance on regulatory requirements. By outlining its decision-making processes, ASIC ensures transparency, helping current and prospective licensees understand what is expected of them in terms of compliance and best practices.
The report also reinforces ASIC’s role as a key regulatory player, not only in traditional finance but also in emerging industries like fintech and cryptocurrency, where new business models and technologies require close regulatory oversight.
