Treasury reveals details of new ASIC powers

A new consultation paper titled Strengthening ASIC Licensing Powers has been released by Treasury's ASIC Enforcement Review.

The paper, drafted by the ASIC Enforcement Review taskforce, lays out seven position statements it claims will strengthen ASIC's powers in line with recommendations of the Financial System Inquiry.

First, ASIC should be able to take action if it suspects the controllers of an Australian financial services licence (AFSL) are not 'fit and proper' upon their application (or change of control of the AFSL).

There should also be a statutory obligation for controllers of an AFSL to notify ASIC if there is a change of a control – and ASIC should have the ability to impose penalties if there is a failure to notify.

Third, AFS licence application assessments should be aligned with the enhanced credit license requirements adopted in 2010.

ASIC should also have the power to cancel or suspend an AFSL if the licensee fails to commence business within six months, said the consultation paper.

Fifth, penalties for false or misleading statements in financial services and credit should be aligned.

Misleading or false statements in an AFSL application should be a "specific basis for refusing to grant the licence".

Finally, applicants should be required to confirm that there have been no material changes to information given in the application before the licence is granted.

Submissions on the positions outlined in the consultation paper are due by 26 July 2017.

The taskforce has also released two additional consultation papers on industry codes of conduct and search warrant powers.

 Back in April, the ASIC Enforcement Review Taskforce released its consultation paper titled Self-reporting of contraventions by financial services and credit licensees’  which proposed that tougher reforms be implemented in regard to licensees' reporting misconduct.