FOI documents reveal ASIC’s involvement in FASEA code
Documents obtained under Freedom of Information (FOI) have confirmed the intense consultation which occurred between the Financial Adviser Standards and Ethics Authority (FASEA) and the Australian Securities and Investments Commission (ASIC) in the development of the final FASEA code of ethics.
The documents, provided to Money Management, cover a nearly 12-month period and make clear that ASIC’s views on the shape of the code were significantly accommodated by FASEA particularly with respect to examples and guidance.
However, in its communications with FASEA, ASIC made clear that it did not want its work on the code of ethics attributed to it.
In an e-mail dated 8 November, 2018, dealing with ASIC guidance around ethical behaviour, ASIC senior specialist, financial advisers, Leah Sciacca wrote: “Attached is a document containing some further thinking/ideas on the examples we discussed on the phone. I confirm that ASIC provides this document to FASEA on the basis that it may assist FASEA prepare its guidance and the examples it wishes to include”.
“Additionally, while we are happy to look over the final FASEA examples, we are not able to approve or endorse them, nor should they be attributed in any way to ASIC, as it is for FASEA to determine whether they achieve the desired purpose.”
The documents obtained under FOI reveal that FASEA kept in close contact with ASIC seeking its feedback on key elements of its code of ethics approach from April/May 2018 all the way through to early 2019 in circumstances where FASEA released its Code of Ethics Standard on 11 February, 2019.
The close consultation with ASIC over the development of the code revealed in the FOI documents stands against the background of a FASEA response to a question from South Australian Senate cross-bencher, Rex Patrick, during Senate Estimates, around how the code had been developed.
The FASEA response stated: “The board of FASEA determined to make the code of ethics on 8 February, 2019. As part of its decision-making process for determining to make the code of ethics, the board received and gave due consideration to a range of matters including:
- Input from the collective skills of management and directors;
- Feedback from stakeholders received from two rounds of public consultation in March-June 2018 and November-December 2018; and
- Review and analysis of stakeholder feedback.”
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
