ASIC grants three-year exemption from compliance scheme obligations

The corporate watchdog will make a legislative instrument to provide relief to Australian financial services (AFS) licensees from financial adviser compliance scheme obligations, it has announced.

The Australian Securities and Investments Commission (ASIC) said this followed the government’s announcement on 11 October that it would accelerate the establishment of a single disciplinary body for financial advisers and would displace the role of compliance schemes in monitoring and enforcing the Financial Planners and Advisers Code of Ethics 2019.

“As a result, compliance scheme applicants have withdrawn their applications to ASIC for approval of their compliance schemes. This means the compliance scheme regime will not be able to proceed at this time,” ASIC said.

“ASIC will take immediate action to provide certainty for AFS licensees that they will not be in breach of the law because their financial advisers were not able to register with an ASIC-approved compliance scheme by 1 January, 2020, as originally required.”

ASIC said it would grant a three-year exemption to all AFS licensees form the obligation in the Corporates Act 2001 to ensure their financial advisers were covered by a compliance scheme, and from the associated notification obligations.

“AFS licensees will still be required to take reasonable steps to ensure that their financial advisers comply with the code from 1 January, 2020, and advisers will still be obliged to comply with the code from that date onwards. ASIC may take enforcement action where it receives breach reports,” it said.