ASIC to take ‘practical’ and ‘reasonable’ approach to disciplinary body

The Australian Securities and Investments Commission (ASIC) expects to take a “practical and reasonable” approach to the single disciplinary body (SDB) which is due to take effect on 1 January, 2022.

Speaking at the Association of Financial Advisers (AFA) conference, ASIC chair, Joe Longo said while the SDB legislation had not passed yet the regulatory approach would “be practical and reasonable with the way those requirements are implemented”.

“We're not quite ready yet to announce how we plan the details around how we plan to implement provisions. We're working closely with Treasury and the government to ensure that the legislation is implemented consistently with its objectives,” Longo said.

“At this stage that's all I can really say about. But we are gearing up and we understand the significance of these reforms for the industry and we look forward to doing it.”

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Answering a question on the ASIC levy, Longo noted that he did not expect the regulatory to increase its focus on advisers in the coming period.

“In terms of a percentage of the resources of ASIC I think what you can expect is that [focus on advisers] to decline. But having said that, we do have the single disciplinary body coming our way and other reforms,” he said.

“It remains to be seen exactly what the costs will be. Of course, the government's made an announcement fixing the levy on financial advisers for a couple of years and secondly, there's going to be a review of the industry funding model.

“This is really an example as well on the law mandating how our costs and levy works. Coming out of the review we'll have to wait and see what impact that will have on advisers.”

Longo also said that ASIC was also working on a new financial advice web page that aimed to consolidate and centralise all advice related content.

“We're going to try and improve practical guidance and examples we give around records of advice and limited advice. This is an area where I think the industry and advisers can occasionally take an unduly conservative approach to compliance with Chapter 7.7, where these requirements will be found that the law talks about a clear and concise document,” he said.

“And occasionally the feedback I get from my own staff is that the industry can sometimes take an overly cautious or compliance oriented approach to these documents, which obviously adds cost, but also might not necessarily meet the needs of consumers to have sort of a shorter, clearer, more concise document.”