The Australian Securities and Investments Commission (ASIC) has revealed it cancelled 404 Australian credit licences between 1 July 2016 and 30 June 2017.
A new report released by ASIC on Thursday (30 November), Overview of licensing and professional registration applications
, delved into credit licence applications, variations, cancellations and suspensions during this 12 month period.
A total of seven credit licences were suspended and 404 were cancelled during the year-long timeframe. Common reasons included firms entering into external administration, becoming deregistered, failing to comply with its licence conditions, ceasing to engage in credit activity or applying to ASIC for suspension or cancellation.
Of the 404 licence cancellations, 97 were initiated by ASIC through enforcement action while 309 were initiated by the licensee themselves. Main reasons included insolvency and the cessation of credit activities.
“There were seven ASIC-initiated suspensions during the relevant period. Reasons for the suspensions included insolvency and not having a responsible manager with the required competence,” ASIC wrote in its report.
Passing the application process
Out of 878 credit licence applications considered during the stated 12-month period (including variations), a total of 649 (or 74%) were finalised. Of those finalised, 256 new licence applications and 150 licence variations were approved. The rest were either rejected or withdrawn during the lodgement process.
“The most common reason for withdrawals is linked to the quality of the application –that is, where we communicate to the applicant, and the applicant agrees, that the final outcome is likely to be a refusal if the matter proceeds to a hearing,” ASIC wrote.
Rejections and withdrawals in a “significant number of cases” were also due to applicants nominating responsible managers that the regulator said could not demonstrate relevant experience.
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