New ASIC Authority Allows for Quick License Cancellation
Inactive holders of Australian Financial Services Licences (AFSL) are at risk of losing their licenses, as per the newly granted authority to ASIC, the Australian financial watchdog. These new powers were granted after a public comment was made in response to the ASIC Enforcement Review Taskforce Report back in 2017.
Earlier this year, in February, ASIC acquired the capacity to swiftly cancel AFSL and ACL (Australian Credit Licenses), if the company at hand had not begun its operations within the first six months of receiving a license.
Currently, a number of companies with dormant AFSL are close to having their licensed revoked.
Co-CEO of Traction Fintech Sophie Grace, said “We understand that there are a number of AFSLs holding authorisations that cover the operation of a retail forex brokerage which are not currently being used and may not have been used for quite some time“.
ASIC stated that “Licence holders will be able to seek an extension of time from ASIC if they are unable to commence their financial or credit business during the six (6) month period after being granted their AFSL or ACL. This extension should be sought before the expiry of the initial six (6) month timeframe.”
These new powers are important for maintaining Australia's financial market integrity, and also address the issue of how long a newly licensed firm must wait before commencing business.