ASIC extends interim compensation regime
The current minimum compensation arrangements applying to holders of an Australian Financial Services (AFS) licence will continue to apply for another six months, while the Government determines the future of the compensation regime.
That is the bottom line of a decision by the Australian Securities and Investments Commission (ASIC) to extend the transitional compensation arrangements for another six months.
ASIC’s director general of regulation Malcolm Rogers said the regulator was continuing the transitional arrangements for six months to maintain the current minimum compensation requirements while the Government considers its position.
Under the Corporations Act, AFS licensees that provide financial services to retail clients are required to have in place arrangements to compensate people for loss or damage suffered as a result of any breaches of the Act.
The transitional arrangements require that affected AFS licensees hold professional indemnity insurance, that dealers and advisers in investment products remain subject to security deposit requirements, that insurance brokers remain subject to professional indemnity insurance and that market operators maintain fidelity fund-style compensation arrangements.
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