Compliance costs to grow under FSRB
The impact of the Financial Services Reform Bill (FSRB) on the industry could spell out increased paperwork and higher costs.
Andersen Legal director of corporate and finance Alan Jessup, who specialises in funds management and corporate and securities regulation, says financial services practitioners will need to ensure they have adequate systems in place if they are to meet their obligations under the Act.
"These include compliance procedures, manuals, reporting surveillance systems, supervision practices and training programs for employees," Jessup says.
"This means extra staff and resources. The cost to business could increase significantly."
Jessup says practitioners will need to review their professional indemnity insurance policies because under the Bill, they have an "absolute obligation" to have such arrangements in place to cover for compensation in the event of breaches of obligations by practitioners.
"There may be a need for practitioners to have provisions for compensation in addition to their insurance cover," he says.
Recommended for you
Bravura Solutions has appointed a group chief executive following the exit of Andrew Russell, but the successor will be based outside of Australia.
ASIC has clarified the outcome of whether it will “name and shame” AFSLs over their reportable situations and internal dispute regimes following feedback from industry stakeholders.
The Compensation Scheme of Last Resort has paid out 551 claims since operations began in April 2024, with $36.7 million to victims of Dixon Advisory and Superannuation Services.
Having reinstated the membership of United Global Capital, AFCA will also continue to accept complaints from Next Generation Advice beyond its original expiration.
