More than 500 SMSF licensing applications in limbo
An industry lawyer has warned accountants that many of the 582 limited licence applications still pending assessment could take several months for ASIC to process, and are not guaranteed approval.
An update from ASIC yesterday revealed that out of the 1,146 licence applications it received from the beginning of the transitional period, only 317 have been granted a licence of have been offered a draft licence.
A further 582 applications are still yet to be assessed by ASIC while another 264 applications have been withdrawn or returned to applicants because they were "incomplete, deficient, or missed mandatory information".
Two licences that were refused by ASIC have been referred to an ASIC Hearing’s Delegate.
Speaking to SMSF Adviser, Holley Nethercote partner David Court said some of the pending applications that were lodged in the very late stages of the transitional period may take several months to be processed.
"There are two outcomes [for pending licence applications]; they’ll either be rejected if they don’t meet the requirements or if they’ll be accepted and get a licence in due course, which could be several months at this stage," said Mr Court.
"Once the accountant has the licence they’re good to go, but in the meantime they’ll be treated as if they’re unlicensed."
Mr Court said there will be some scope with the pending applications to provide ASIC analysts with additional information, where required.
"It may get to the point with some applications where ASIC says the application is not good enough and they’ll reject it," he said.
"The rejection rate for limited licensing for accountants has been fairly high compared to other types of financial services licensing so I imagine a fair few of the 582 would be rejected."
Mr Court said that ASIC is concerned about the low levels of licence applications as it thinks a lot of accountants have simply chosen to ignore it.
"ASIC will now move from a licensing environment to an enforcement environment, and they’ll start looking in a lot more detail at accountants who aren’t licensed, and seeing whether they should be," he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.