In the wake of the Financial Adviser Standards and Ethics Authority (FASEA) exam extension legislation stalling in the Senate, the Government is being asked to back Australian Securities and Investment Commission (ASIC) class order relief to achieve the same outcome.
According to Association of Financial Advisers (AFA) general manager, policy and professionalism, Phil Anderson there is no question that ASIC has the powers under the FASEA legislation to deliver that class order relief.
He said the explanatory memorandum around the professional standards bill made the position clear.
“This clearly sets out that ASIC has exemption powers under Section 926A of the Corporations Act that apply in the case of the professional standards legislation,” Anderson said. “Paragraph 2.53 specifically states that these powers apply to the transitional arrangements for existing advisers (i.e. the exam deadline). The bill actually amended Section 926A to provide ASIC with powers with respect to the Professional Standards transitional arrangements for existing advisers (Part 10.23A). Paragraph 2.55 includes the following specific reference: ASIC has used its exemption and modification power to provide administrative relief in circumstances where the strict operation of the Corporations Act produces unintended or unreasonable outcomes.”
“Given the delay in the availability of the FASEA exam, the Government policy announcement of an extension in August 2019 and the impact of the coronavirus, we can certainly argue that in the absence of an extension, it would result in unintended and unreasonably outcomes,” he said.
Anderson’s claim came at the same time as the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, placed blame for the exam extension bill not passing the Parliament at the feet of the Opposition Australian Labor Party (ALP).
“At a time when access to quality financial advice is so important to Australians, I am extremely disappointed the passage of this Bill has been frustrated by the Labor Party - in little more than a cheap political stunt,” she said.
“Like so many small Australian businesses, financial planners are feeling the impacts of the COVID-19 pandemic. Many advisers are juggling the addition needs of clients in financial distress, a business operating with social distancing requirements, and increased demands of family.”
Financial planning organisations are now expected to point out to Hume that, just as the Government had done with respect to FASEA code monitoring bodies, the Government should now ask ASIC to issue class order relief with respect to the FASEA exam timetable.