ASIC issues new FSR compliance guidelines
TheAustralian Securities and Investments Commission(ASIC) has issued five compliance guidelines to the market offering practical advice to operators of managed investments schemes.
The commentary papers aim to provide further assistance to industry in order to meet news regulation under Financial Services Reform and ensure the right measures are in place to monitor and address compliance risks.
The guidelines include two new commentaries for mortgage schemes, and three revised commentaries for financial asset, property and agricultural schemes.
ASIC says that all commentaries should be considered alongside Policy Statement 132Managed Investments: Compliance plans(PS 132).
The new commentaries for mortgage schemes (contributory and pooled) include a precise guide on the recommended practice for borrower assessment, valuations and default handling procedures.
The three revised commentaries are based on a comprehensive review of a large number of compliance plans, breach notifications and audit reports that have been lodged with ASIC over the last two years.
The review aims to determine which type of compliance plan may be more likely to result in a breach of the plan or in a determination that the compliance plan is inadequate. Surveillance activities relating to responsible entities have also been reviewed.
According to ASIC financial services regulation executive director, Ian Johnston, the mortgage commentaries are particularly important in view of the ASIC enquiry into the state regulated solicitors’ mortgage schemes and the serious issues that were highlighted as a result of that inquiry.
“The commentaries have adopted a number of recommendations from the report on the outcomes of the inquiry, particularly those that were supported by ASIC’s findings from its surveillance visits,” Johnston says.
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