ASIC defines limits on superannuation funds advice
The Australian Securities and Investments Commission (ASIC) appears to have drawn a line under how far it is prepared to go in allowing superannuation funds to provide financial advice utilising web-based facilities and third parties without holding an Australian Financial Services (AFS) licence.
ASIC's line was revealed in its September quarter report on relief decisions in which it refused relief sought by the provider of a web-based superannuation clearing house product which it regarded as a non-cash payment facility.
The ASIC report said the provider had sought an exemption with respect to the need for superannuation trustees to hold an AFS licence authorising the provision of financial product advice and dealing.
The ASIC report said the proposed relief would have been similar to the relief in Class Order [CO 03/705] Non-cash payment facilities -- licensing exemption, in that it would facilitate AFS licensees (in this case, superannuation trustees) providing financial product advice and arranging for dealings in certain NCP facilities (in this case, a clearing house arrangement that is an NCP facility) without being authorised by their AFS licence to do so.
It said the relief was proposed to apply when these services were provided to employers contributing to the superannuation trustee's superannuation fund through integration of parts of the applicant's website page for the clearing house into the superannuation trustee's website.
ASIC said relief was required because the proposed arrangement may have constituted dealing by a trustee by arranging for the employers to apply for and to acquire the NCP facility or for the applicant to issue it.
However in refusing the request, the regulator said: "We also considered that the applicant's proposed arrangement may have implied a recommendation intended to influence employers and amounted to the provision of financial product advice."
Among the reasons given by ASIC for refusing the application were that the arrangement might have made it less easy for people to understand the product.
As well, it said the trustees for whom relief was sought arguably would have derived benefits such as the enhanced ability to retain employers, and by extension default members.
"Given this and the protections provided by the application of the AFS licensing obligations, we considered that it would not be unreasonably burdensome for the relevant trustees to obtain the necessary licence authorisations," ASIC said.
AUTHOR
Mike Taylor
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