Regulatory investment a 'good faith' move
Although the corporate regulator will take a ‘reasonable’ approach towards enforcing the new October regulations, having the right systems in place to show “good faith” towards compliance will help licensees if they get into any trouble, according to Advice Regtech.
The Australian Securities and Investments Commission (ASIC) said last week that it would take a “reasonable” approach at the early stage of the October reforms, which included breach reporting.
The corporate regulator was empathetic to the fact it would require significant changes to businesses.
Samantha Clarke, Advice RegTech chief executive and co-founder, said they had been getting approached because it showed advisers had acted in good faith by being pro-active.
“The guidance from ASIC has said as long AFSL’s [Australian financial services licensees] are endeavouring to act in good faith to understand what the relevant reportable situations are,” Clarke said.
“As long as they’ve got the systems and processes and they’re endeavouring to get on top of that by bringing on more systems, they won’t necessarily be more lenient, but they’ll take that into consideration as part of their assessment and judgements.”
In its draft regulatory guide for breach reporting (RG 78), ASIC said: “We consider that having robust breach reporting systems, processes and procedures in place is a key component of a licensee’s compliance and risk management framework”.
This sentiment was echoed at the Financial Services Council (FSC) Life Insurance Summit in April, where ASIC said there would be a focus on the spirit of policy when it comes to defining upcoming compliance regulations.
“The thing that stands out to me is compliance with the spirit of the policy intent, rather than a strict and literal understanding of what requirements are,” Emma Curtis, ASIC senior executive leader – insurers, financial services and wealth group, said.
AUTHOR
Chris Dastoor
Recommended for you
After seven years at the company, Iress’ chief technology officer for wealth management APAC, Anthony Gerrits, has departed as the firm commences a search process to fill the role.
With advice firms thinking about scaling up in 2025, research has detailed the main avenues financial advisers say they have used for successful recruitment.
The board of Insignia Financial has reached a decision regarding the possible acquisition of the firm by US private equity giant Bain Capital.
Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses.
