ASIC explains what justifies calling advisers ‘advisers’
The Australian Securities and Investments Commission (ASIC) has defended the manner in which it describes “financial advisers” when dealing with banning and other penalties in its media releases.
It gave this defence after it was directly questioned within a Parliamentary Committee over why it described a man who attempted to “artificially satisfy the minimum spread requirement for companies seeking to be admitted to the Australian Securities Exchange (ASX)” as a “former financial adviser”.
NSW Liberal backbencher, Jason Falinski had asked about ASIC describing the man as a financial adviser when he “did not provide financial advice as commonly understood by investors and consumers”.
However, ASIC said it did so because he had been an authorised representative of a licensee.
ASIC’s formal answer stated:
“ASIC advances its statutory role by, among other things, taking action against misconduct to maintain trust and integrity in the financial system. For the financial advice sector, this is about ensuring consumers have trust and confidence in seeking financial advice and that those providing services to consumers are held to account for any misconduct they engage in.”
“For ASIC, as well as focusing on poor advice, it also takes action for other misconduct by persons operating in the financial advice sector to ensure the integrity of the sector.”
“In this particular case, ASIC took action against a person for dishonest conduct related to attempts to artificially satisfy the minimum spread requirement for companies seeking to be admitted to the ASX, which conduct interferes with the fair and orderly operation of the market and undermines its integrity.”
“The person engaged in part of the offending in the course of, and in connection with, his role, at the time, as an authorised representative of an Australian financial services licensee, by whom he was authorised to provide advice in relation to financial products. The description ‘former financial advisor’ reflects the person’s role at the time of the offending.”
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