'Spirit of intent' focus of compliance guidance

The Australian Securities and Investment Commission (ASIC) has said there will be a focus on the spirit of policy, rather than a strict understanding on requirements when it comes to defining upcoming compliance regulations.

Speaking at the FSC Life Insurance Summit, Emma Curtis, ASIC senior executive leader – insurers, financial services and wealth group, said: “We’re working on guidance on breach reporting, internal dispute resolution (IDR) and hawking so there’s a number of cross industry, cross sector reforms that don’t just apply to life insurance, but will have a big effect on operations.

“We’re working hard to put out some guidance as to what compliance looks like with those obligations.

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“The thing that stands out to me is compliance with the spirit of the policy intent, rather than a strict and literal understanding of what requirements are.”

Curtis said that was going to help with insurers to demonstrate a proactive consumer-centric compliance culture.

“It’s a bit of a watch this space to see what the draft guidance looks like, then review it, and provide submissions back to us during the consultation period,” Curtis said.

“That’s really going to help us shape that guidance so its suitable and useful the industry.”

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Lord give me a break. HOW can the regulator determine your 'spirit of intent' rather than 'the letter of the law'?

"Spirit" is all touchy-feely. It isn't open to interpretation - it IS interpretation. So every single case will be determined by crocodile tears (ie who can cry the most convincingly).

Imagine if the speed limit on a road wasn't 'posted' but 'spirit'. I can see it now "I may have been going very fast, Officer, but my 'intent' wasn't to speed, just to get to work quickly before my boss, cos he's running late, so my actions were in the right spirit".

No, as much as I hate the regulators wobbly rules, clear rules are what is required.

To use your speeding analogy, the spirit of the speed limit is to prevent accidents. A cop fining people going 81kph just inside the point where the limit drops from 100kph to 80kph is not within the spirit. But this is exactly what ASIC does with their obsession on the intricate details of SoAs, FDSs, FSGs, and their requirement for 10 years irrefutable documentary proof of every service deliverable. It is regulatory persecution that is not within the spirit of the law.

Cops should be focusing their time and energy on vehicles that are causing danger to others. Just as ASIC should be focused on dodgy advice (including from unlicensed providers) that is putting consumers in a much worse position.

The sentiment espoused by the ASIC presenter is admirable. However ASIC still has a firmly entrenched culture of bias and persecution which runs counter to this sentiment.

ASIC tell you they do NOT interpret the regulations. Just ring them and ask a query on RG146 or any other guide, or the corps law.

ASIC has enormous interpretive and enforcement discretion. The laws themselves are quite ambiguous, and ASIC are the ones who decide what they mean. ASIC also has the power to create additional subregulations in some cases. ASIC also decides where and how to allocate its enforcement resources. ASIC has deliberately chosen to put lots of resources into persecuting licensed advisers for the most minor of administrative issues, while virtually ignoring union funds and unlicensed advice.

The biased bureaucrats at ASIC have far more influence on the regulatory environment than elected politicians.

Yeh sure ASIC we nearly believe you....huh huh huh huh Not
Cant wait to read another 350 pages of minute details of more Regs.
Yep more Regs, more Regs, more Regs.
Never a reduction in Regs only an ever increasing exponential rise in more Regs, more Regs and guess what more Regs.

Is this the same ASIC that just released a regulatory guide, less than 4 weeks ago, that does not allow advisers to complete the new annual consent if they meet with a client early, even 1 day before the anniversary date? 'Spirit of intent' sounds good, but until ASIC put it in black and white in regulatory guides, I call BS on these comments.

Here lies the problem. The rules and regulations are so poorly designed they have to give guidance on how to meet all the obligations. The rules designed by a bunch of politicians and lawyers. ASIC then pays another bunch of lawyers to interpret them and write hundred of pages of unclear guides. Licensees then pay another bunch of lawyers to give their opinion which adds another layer. The intent of the rules are lost and the end result does not benefit the client one bit. The only winners are the lawyers and their billable hours. Has anyone worked out what the problem is yet, because it isn't financial planners who are desperately trying to provide advice and service to their clients without being tripped up by the 9 various bodies that want to regulate (and prosecute) them to justify their existence.

why not litigate? what's happened to that mantra? now replaced with the good spirit....

problem is this sounds nice but only works if built on a strong platform of trust...and NO-ONE in the industry trusts ASIC when it comes to complying with obligations...its why AFSL's have and still do go so extra hard on their compliance regimes based on conservative compliance interpretations...they know if the sh*t hits the fan ASIC won't care 2 hoots about your "intent"...so sadly this just won't wash with any practitioners

Look back programmes would never have occurred if the spirit was alive! The regulator knew for several years that Licensee standards were the offer of a review was acceptable.

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