It may take up to a year for ASIC to complete the processing of the remaining limited licence applications, leaving many SMSF accountants in the lurch, says one SMSF compliance expert.
Speaking to SMSF Adviser, Sophie Grace Compliance and Legal director Sophie Gerber said the slow pace at which limited licence applications are being processed by ASIC is causing significant issues for some accountants.
“The slowness of licensing is causing a lot of problems and turning people off doing business in some cases,” said Ms Gerber.
“A lot of the accountants lodging applications at the tail end of the transitional period probably thought they’d slip through quickly and that’s not what’s happened.”
At last count, ASIC said that out of the 1,146 licence applications it received from the beginning of the transitional period, only 317 have been granted a licence or 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 A further 582 applications are still yet to be assessed by ASIC while another 264 applications have been withdrawn or returned to applicants because they were “incomplete, deficient or missed mandatory information”.
Ms Gerber said the increased funding ASIC is set to receive may however flow through to a lot of the backlog issues such as licensing.
While Ms Gerber believes ASIC will be too consumed with processing licence applications to closely monitor compliance with licensing over the next 12 months, she’s warned that accountants shouldn’t become complacent.
“ASIC can still identify incidents occurring now where accountants have provided unlicensed advice and flag them further down the track,” she said.
On the financial advice side, Ms Gerber said ASIC will continue to closely monitor compliance around best interests, particularly after the legal case concerning NSG Services.
ASIC announced in June it had commenced proceedings against the Melbourne-based firm, alleging the licensee had breached the best interests duty.
Depending on the outcome of the case, Ms Gerber said it could potentially have significant implications for the SMSF industry, in terms of how SMSFs interact with the Corporations Act.
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