Although the corporate regulator will take a ‘reasonable’ approach towards enforcing the new October regulations, having the right systems in place to show “good faith” towards compliance will help licensees if they get into any trouble, according to Advice Regtech.
The Australian Securities and Investments Commission (ASIC) said last week that it would take a “reasonable” approach at the early stage of the October reforms, which included breach reporting.
The corporate regulator was empathetic to the fact it would require significant changes to businesses.
Samantha Clarke, Advice RegTech chief executive and co-founder, said they had been getting approached because it showed advisers had acted in good faith by being pro-active.
“The guidance from ASIC has said as long AFSL’s [Australian financial services licensees] are endeavouring to act in good faith to understand what the relevant reportable situations are,” Clarke said.
“As long as they’ve got the systems and processes and they’re endeavouring to get on top of that by bringing on more systems, they won’t necessarily be more lenient, but they’ll take that into consideration as part of their assessment and judgements.”
In its draft regulatory guide for breach reporting (RG 78), ASIC said: “We consider that having robust breach reporting systems, processes and procedures in place is a key component of a licensee’s compliance and risk management framework”.
This sentiment was echoed at the Financial Services Council (FSC) Life Insurance Summit in April, where ASIC said there would be a focus on the spirit of policy when it comes to defining upcoming compliance regulations.
“The thing that stands out to me is compliance with the spirit of the policy intent, rather than a strict and literal understanding of what requirements are,” Emma Curtis, ASIC senior executive leader – insurers, financial services and wealth group, said.
Comments
In breaking news... software company that purports to assist with managing regulatory overload, says introducing an even greater regulatory burden is a great thing.
No Samantha, the only solution to lots and lots of bad regulation, is regulatory reform. Not your expensive, gimmicky, product.
Why are 90% of Money Management articles disguised promotion of 'product/system floggers' which purport to make an AFSL's life easier. For example, how can software analyse and confirm that the advice given in a Statement of Advice is advice that is appropriate for the actual client (based on their personal circumstances / objectives / risk tolerance etc) and it is in their best interest? Does it merely identify 'words' and come to the conclusion that because certain words are included in the SoA it must be compliant and therefore give the AFSL a false sense of security in respect of the advice given.
Yes... That's how they identify how an adviser may have passed or failed the FASEA exam, so why not use the same technology for breach identification?
We should all be using "Robo-technology" for producing SOAs.
When has ASIC ever acted in good faith, well unless it is in the interests of the union fund mates. Just another regulation that will be used as a weapon to kill small advice businesses.
The new breach reporting regime will also be used by dealer groups as a weaponised compliance tool against those advisers who don't sell enough inhouse product. Another Hayne fail.
There can be no disguising of the fact that nothing ASIC do is for the betterment of the industry. They are clueless bureaucrats who believe the public are idiots and red-tape will protect the "idiots".
Liar liar ASIC on fire yet again.
ASIC tell so many lies they almost believe their own crap.
ASIC SHOULD BE MADE TO USE LIE DETECTORS FOR EVERY PUBLIC ANNOUNCEMENT / COMMENT. And then we can all clearly see that the majority of what ASIC say are Utter LIES!!!!!
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