FTX-style AFSLs hard to get and consequently expensive

Mike Taylor

Managing Editor/Publisher, Financial Newswire

13 February 2023

The Australian Securities and Investments Commission (ASIC) has admitted that licenses of the type held by collapse crypto exchange, FTX, are only rarely granted – something which has driven up their cost on the open market.

In fact, only eight equivalent Australian Financial Services Licenses (AFSLs) have been issued by ASIC over the past nine years.

The FTX license was acquired by way of a transfer rather than being granted by ASIC, and ASIC chief operating officer, Warren Day told the Parliamentary Committee on Corporations and Financial Services that the number of such licenses in the market is very low.

“We’ve handed out very view – it would be a handful – with that authorisation since 2014,” he said. “As a result, the off-market price of such a licence has been going up considerably over the last eight years.”

The type of AFSL in question carries authorisations with respect to making a market and providing general financial product advice in relation to derivatives and foreign exchange contracts to retail clients and wholesale clients.

ASIC’s formal response to a question on notice from the chair of the Parliamentary Committee, Deborah O’Neill stated that there were 50 AFSLs with at least the same authorisations as held by FTX Australia Pty Ltd.

It said that eight of those 50 AFSLs had been granted since 2014.