ASIC assures industry over FSR policing

TheAustralian Securities and Investments Commission(ASIC) will take a practical approach to regulating the new licensing and disclosure regime under the Financial Services Reform Act. 2001 it confirmed today.

“ASIC is committed to ensuring that the outcomes of the FSR Act are delivered in a realistic manner. We recognise there are still areas of uncertainty, particularly in relation to disclosure and reporting of breaches under the FSR legislation,” ASIC Executive Director of Financial Services Regulation Ian Johnston says

Johnston says the peak regulator will continue to consult with industry and consumer groups over the next 12 months in a bid to provide guidance where it is needed

“ASIC recognises that many licence holders will be regulated for the first time. Those that are genuinely attempting to comply with the new law will have little to fear from ASIC. We are more concerned about breaches that are deliberate or systemic,” Johnston says.

ASIC is aware that some AFS licensees may be in technical breach of their licence, and that those which are should act to remedy this situation by immediately applying to adjust their licence specificatioins.

These technical breaches are likely to be where licensees acting under a binder did not apply for the ‘issue’ authorisation for general insurance products, or where licensees applying early in the transition period were not able to select the authorisation to advise in managed investment schemes, or finally for licensees providing services in relation to products that fall strictly outside the normal product class definitions.

“Where a licensee has made a simple omission at the time a licence application was made and no further assessment would have been required at the time, ASIC will not carry out any further assessment in relation to the technical variation,” Johnston says.