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Step 3 - Assessment

Once your application is received, APRA's licensing team reviews your information and start to assess the application.

Assessment of application

APRA will review the information provided in your application and may request additional information, and have meetings with you to review aspects of your operations on-site. APRA will make its expectations clear and straightforward, through communication of policies and rules.

In assessing the application, APRA will seek to understand the risks your business will face and your capabilities in addressing those risks. APRA will need to be confident that if you are granted a licence your business will be financially sound, you will manage your risks effectively, meet fit and proper expectations, have a sound risk culture and not pose a risk to financial safety or the stability of the financial system.

Proposed new institutions can vary widely in their impact and complexity. Consistent with APRA’s risk-based approach, the depth of the assessment will be proportionate to the risks involved within your institution.

Timeframe for approval

The time taken to obtain a licence may vary. It depends on the quality of application lodged, the complexity of the proposed arrangements and how responsive you are to APRA’s requirements and requests throughout the assessment period. 

A licence assessment is generally an iterative process with an applicant submitting and then resubmitting documents, either in response to APRA feedback, or as the applicant’s circumstances change, or as it refines its proposal. Once APRA is satisfied that it has a substantially complete/final application, a licensing decision is ordinarily made within 90 days. The application process from initial submission until substantially complete/final application may take twelve - eighteen months depending on the readiness of the applicant and complexity of the business.

While your licence application is pending, it is important you notify APRA of any material changes to the supporting information you have lodged. As an example, you must notify APRA of any changes to the composition of the board and management. Failure to notify APRA can delay your application or possibly result in it being declined.

The decision

Members of the licensing team, in consultation with supervision and risk specialists, will make a recommendation to approve or decline your application. The final decision to licence your business is made by a decision-maker who is independent of the licensing team.

If your application is approved, APRA will advise in writing of its decision and will include your licence. Your licence will set out the date from which it takes effect, and any restrictions or conditions to which you are subject.

Licence with conditions

Depending on the nature of your business, APRA may impose conditions on your licence. Some types of licencees such as registrable superannuation entity (RSE) trustees and foreign authorised deposit-taking institutions (ADIs) have standard additional conditions added to their licence.

In addition, if your business has a limited business model, APRA is likely to focus its assessment on your ability to meet the aspects of the prudential framework relevant to the proposed business, and may not assess some aspects that would be applicable to a broader service institution. Given this, APRA may impose conditions on your licence which limit the lines of business you can offer to those in your original licence application.

If you have conditions on your licence limiting the lines of business you can offer, you may continue to operate indefinitely within the bounds of those conditions. However, you can approach APRA at a later stage to consider amending or removing conditions if you wish to expand your business. As when you applied for your licence, you would need to demonstrate you can meet the aspects of the prudential framework relevant to your new expanded business model prior to APRA granting consent for the conditions to be amended or removed.

When an application is declined

APRA will advise its decision to decline your application in writing. You will be advised of the reasons and will be given the opportunity to discuss this with APRA and you can request APRA review its decision.

If you are dissatisfied with the outcome of APRA’s review then you may make an application to the Administrative Appeals Tribunal for it to review APRA’s decision.