ASIC confirms licensees have been notifying adviser code breaches

9 April 2020

The financial planning industry may not have code-monitoring bodies and the Government may not yet have come up with its single disciplinary body, but that hasn’t stopped licensees dobbing advisers and themselves in via breach notifications.

The Australian Securities and Investments Commission (ASIC) has revealed that it has received “a small number of breach notifications (6 in total) from AFS licensees about the licensee failing to take reasonable steps to ensure their advisers comply with the code”.

Answering a question on notice form the Parliamentary Joint Committee on Corporations and Financial Services, the regulator said that under the Corporations Act 2001, as amended by the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017, financial advisers would have been required to be covered by an ASIC-approved compliance scheme from 1 January 2020.

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“The timelines for applications for approval of a compliance scheme were set out in ASIC Regulatory Guide 269 Approval and oversight of compliance schemes for financial advisers. We expected to announce all approvals for compliance schemes in early October 2019, with the schemes commencing operation shorty after approval,” the ASIC answer said.

“With the withdrawal of all compliance scheme applications and the Government’s announcement that it would accelerate the establishment of a single disciplinary body for financial advisers, there are no existing compliance schemes.”

“Although there are no compliance schemes, Australian financial services (AFS) licensees are still required to take reasonable steps to ensure that their financial advisers comply with the Financial Planners and Advisers Code of Ethics 2019 (code) from 1 January 2020, and advisers are still obliged to comply with the code from that date onwards.”

“ASIC has received a small number of breach notifications (6 in total) from AFS licensees about the licensee failing to take reasonable steps to ensure their advisers comply with the code.”




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