Securities Commission director of supervision Angus Dale-Jones says 27 of 80 QFE applications have been processed, with 25 companies being asked to provide more details.

Dale-Jones says it is a good sign as regulation was designed to encourage companies to take a fresh look at their business models.

"It's about sufficiency of information, not a failing in the provision of information."

He says QFEs almost have a frontline regulatory responsibility themselves and the licencing is the start of a relationship between the regulator and the QFE.

"It's not just us sitting and asking them to fill in a form and tick boxes, it's the process of going through the Adviser Business Statement (ABS) and starting a conversation with the QFE, for them to get used to the contact we will be having with them.

"It's a partnership type approach."

He says the team has highlighted four areas in ABS applications which need more work from companies - competence, suitability, supervision and compliance.

Dale-Jones says in the competence space, while ABS' talk about training arrangements, they have not been making it clear how those training arrangements ensure quality advice being given by QFE advisers.

He says the second area companies need to work on is whether the advice is suitable for the needs of each individual customer, with details required to show companies are not just using a standard set process for advice.

"The process needs to involve asking about the clients circumstances and then tailoring the advice given to ensure it is suitable for the different needs of different customers," he says.

In the areas of supervision and compliance, Dale-Jones says in some cases companies have not made their explanations directly relevant to advice and they haven't explained how management knows whether those areas are properly working.

There must be checking and internal audit mechanisms to ensure systems work properly.

Dale-Jones says the licencing of QFEs is the first step in a long journey.

"We don't only determine if they get the tick for a licence, but we also work out what our priorites will be when we supervise those people in the future, when we monitor them or ask them for additional information. The assessment now helps us tailor what we will do with them in the future."

He says the Securities Commission is aiming to get as many QFEs registered in February and March as possible, so it can move on to processing applications for Authorised Financial Advisers (AFAs) in time for reulation coming into force on July 1 .