The Federal Government has aborted plans to establish Financial Adviser Standards and Ethics Authority (FASEA) code-monitoring bodies, opting instead to move towards a single disciplinary body covering advisers.
The Treasurer, Josh Frydenberg, announced the move late on Friday effectively aborting moves by a consortium of financial planning groups to fund and establish a code-monitoring body.
Announcing the move, Frydenberg said the Government would work towards establishing the new body in early 2021, subject to the passage of legislation which would be introduced into the Parliament next year.
"A long term sustainable solution based on Commissioner Hayne’s recommendations will replace the role of code monitoring bodies which were due to be established by industry associations under professional standards reforms," he said.
"A Code of Ethics will be applied by law from 1 January 2020, and financial advisers will be expected to meet the code’s high ethical standards. Australian Financial Services Licensees will also be required to take reasonable steps to ensure their representatives comply with the code. The Australian Securities and Investments Commission (ASIC) will be able to take action against licensees that fail to do so."
Frydenberg said ASIC was considering the steps it needed to take to ensure that licensees did not breach the law by not registering advisers with a code monitoring body and would provide an update shortly.
"The Government thanks the professional associations and acknowledges the considerable amount of time and resources that have been undertaken towards implementing code monitoring by the end of this year. Treasury will immediately begin engaging with these associations, consumer representatives and other stakeholders to consult on the new system. Roundtables will be held later this year to consider policy design and how to best transition to the new system," he said.