Code-monitoring bodies will need deep pockets
Smaller, less resourced industry bodies are likely to find themselves excluded from consideration as financial planning code-monitoring bodies under a consultative process outlined by the Australian Securities and Investments Commission (ASIC) today.
The regulator has issued a consultation paper in which makes clear that financial and administrative capacity will be key considerations for the selection of code-monitoring bodies.
It also makes clear that code-monitoring will not be the exclusive domain of groups such as the Financial Planning Association (FPA) or the Association of Financial Advisers (AFA) with professional services firms such as Deloitte or KPMG also likely to be considered in the process.
But it is the financial and administrative capacity which is likely to present the most substantial hurdle to organisations looking to get the nod from ASIC with the regulator making clear that it will be seeking to ensure that monitoring bodies have “sufficient resources and expertise to appropriately monitor and enforce compliance with the code under the scheme”.
The regulator also makes clear that it will be looking at the financial, technological and human resources of the monitoring body and where those resources are situated, together with the number of advisers that the scheme is designed to cover.
Releasing the consultation paper, ASIC deputy chairman, Peter Kell said monitoring and enforcing compliance with the code of ethics represented a significant responsibility that would be resource intensive for the bodies that took on the role.
“The compliance scheme framework is key to the successful operation of the proposed code of ethics, which must have the greatest possible influence on the behaviour of financial advisers,” Kell said.
The ASIC consultative process will run for six weeks.
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