ASIC wants breach reporting despite refinements
Even though the corporate regulator has allowed financial planners to contravene sections of the Financial Services Reform Act (FSRA) which are the subject of Government refinement proposals, such breaches will still have to be formally reported.
The request for breach notification from the Australian Securities and Investment Commission (ASIC) came last week on the eve of choice of fund to clear up “confusion in some sectors of the industry” about its compliance approach during the implementation of FSRA.
To quote an ASIC example, if a financial planner were to refrain from giving a client a subsequent statement of advice (SOA) because their client’s initial advice strategy had not changed (a practice recommended under proposed refinement 2.1), it would be alright with ASIC, but the adviser would still have tell them about it.
The 25 proposed refinements, which were announced by the Parliamentary Secretary to the Treasurer in April, also included the recommendation that advisers should not be obliged to include information in an SOA on alternative strategies or products that do not form part of their final recommendation.
Other activities now allowed by ASIC but still requiring breach notification include removing the more generic information from Financial Services Guides (FSG) and tailoring the documents to specific products. Some information in FSGs that is duplicated in product disclosure statements will also no longer be required.
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