As the latest figures from ASIC show a jump in the number of withdrawn applications and that hundreds of limited licence applications remain in limbo, accountants are once again being warned that ASIC will be “on the warpath” come 1 July this year.
ASIC has now received 494 applications for a limited AFSL, up from 276 in late January. One hundred applications have now been approved, up from 88.
While there’s clearly been a spike in activity, ASIC also reported that 165 applications have been withdrawn, and 228 applications remain under assessment or are pending assessment.
Speaking to SMSF Adviser, Mayflower Consulting’s director Sarah Penn said that with less than three months to go until 30 June, if accountants don’t get on board soon, they’re going to be “hugely at risk” of not operating compliantly from 1 July.
“They really needed the warm-up period between now and 30 June, and that doesn’t seem to be eventuating,” she said.
“If I was ASIC I would be half rubbing my hands in glee and half shaking my head in horror. Because, yes, it’s going to be very easy to find people who aren’t doing the right thing, but it really would’ve been better if it was difficult to find people who weren’t doing the right thing,” she added.
She noted in particular the extensive compliance requisites for responsible managers which, if seriously breached, can land a professional in jail.
“ASIC takes it very seriously and they are going to be looking for someone to jump on,” she said.
Even for those choosing the authorised representative route, which it’s believed will be the majority of accountants, there are still strict compliance requirements.
“To operate as an authorised representative, you need to understand the process, you need to be able to produce a compliant statement of advice, you need to understand the things that you can and cannot say around independence, products and a whole pile of other issues, and you need practice at doing that. And this is supposed to be the practice period,” Ms Penn said.
“From 1 July, if you give someone a rubbish SOA, you potentially put that AFSL in breach, they have the report it to ASIC – and it’s a big deal,” she added.
At the end of last month, ASIC reminded accountants they should not expect special treatment when their new licensing arrangements kick in on 1 July.
An ASIC spokesperson told SMSF Adviser that accountants who act illegally come 1 July “are as much as risk of enforcement action as anyone else".
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