The Australian Securities and Investments Commission (ASIC) published a report on Wednesday, detailing its licensing activities in the last financial year, between July 2020 to June 2021. The regulator has issued 339 new Australian Financial Services (AFS) licenses and 119 new credit licenses in the period.
The last fiscal year was a bit different for the regulator as the industry was gripped by the impact of the pandemic, primarily because of the economic lockdowns. Despite that, the agency received 1,883 applications for new or variations of licenses.
The demand for AFS licenses dominated with 565 applications for new ones and 877 requests for variations. Apart from the AFS licenses already granted, the regulator did not approve the applications of 123 AFS licenses while the fate of 281 applications is still pending.
The number of the granted AFS licenses took a hit last year as ASIC issued 394 AFS licenses in the financial year 2019-2020.
Impact of the Pandemic
But, the pandemic impacted the standard procedures followed by the agency in the last fiscal year. Generally, ASIC mandates companies to start operations within six months of receiving their AFS license. However, it extended this period for 27 licensees due to pandemic-related issues.
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“Supporting Australia’s recovery from the economic impact of the COVID-19 pandemic has been central to ASICs work across 2020-21 and will continue to be a priority in the year ahead,” ASIC stated.
Last year was crucial for the Aussie regulator as it brought many changes in the financial services industry. It imposed heavy restrictions on leverage and marketing of leveraged derivatives, especially contracts for differences (CFDs) and banned binary options.
Additionally, the agency extended licensing relief for all foreign financial service providers (FFSPs) until March 31, 2023, allowing them to operate in the country without an AFS license. Additionally, these companies are provided with a fast-track route to obtain an AFS license.
“As a result of the large number of applications received in May and June 2020 relating to the insurance claims handling and debt management services reforms, the volume of applications under assessment is currently relatively high. This may delay the assessment of some applications in 2021-22,” ASIC added.