The Financial Planning Association (FPA) has sought confidential information sharing with the Australian Securities and Investments Commission (ASIC) to facilitate a co-regulatory approach to the financial planning industry.
In a submission filed with the Federal Treasury’s Financial Services Reform Taskforce, the FPA has not only sought the confidential information sharing, but has reinforced what it sees as the differences between ‘industry’ and ‘professional’ codes.
However, its opening recommendation to the Treasury taskforce focused on co-regulation between the Regulator and professions and suggested the amendment of Regulation 8AA of the ASIC Regulations “to include other financial services professional bodies, including the Financial Planning Association, and permit collaborative and confidential information sharing between ASIC and professional bodies to enhance consumer protection”.
The submission also recommended the establishment of a Memorandum of Understanding between ASIC and professional bodies “that facilitates and permits a more collaborative and cooperative two-way working relationship, or coregulatory partnership”.
“Industry codes that apply to licensed entities should recognise and complement the professional codes and the standards such codes require of the individuals who provide direct services to clients,” the submission said.
“The FPA support standards set in an industry code where they fill a gap in consumer protection within the law,” it said. “Ensuring enforceability of an industry code through enforceable code provisions will increase the impact the code has on improving consumer outcomes.”
The submission said it was important to ensure the industry codes were addressing identified issues that were adversely affecting consumers.
“Consideration must also be given to other codes and regulations that may already exist to ensure codified regulation is effective and efficient,” it said.
“Professional codes govern the individual practitioner. In the case of financial advice, the practitioner is a representative of the licensee. The new FASEA Code of Ethics places requirements on the practitioner. The law also requires the licensee to support its representative to adhere to the new Code.”