Reportable situations relief extended for 5 years

ASIC compliance regulation

25 September 2024
| By Laura Dew |
image
image image
expand image

ASIC will extend the relief and requirements regarding reportable situations regime for another five years until October 2029.

The reliefs are due to expire next month, but ASIC said they are “operating efficiently and effectively, and continue to form a necessary and useful part of the legislative framework”.

It had previously announced its intention to extend this in a proposal in early September and said it received six responses to a public consultation.

Four of these submissions advocated for wider relief from the reportable situations regime and two advocated for migration of the relief and/or requirements to the primary law.

Regarding the former, ASIC will determine if wider relief is appropriate and, if necessary, seek feedback on the proposal. In the case of the second matter, ASIC said it has drawn this feedback to the attention of the Commonwealth Treasury.

The relief in ASIC instruments ASIC Corporations and Credit (Breach Reporting—Reportable Situations) Instrument 2021/716 and ASIC Credit (Breach Reporting—Prescribed Commonwealth Legislation) Instrument 2021/801 have been consolidated into one instrument.

However, in its submission to the consultation, the Financial Advice Association Australia (FAAA) said the obligations have caused a significant burden and cost on firms.

“While the FAAA supports the importance of appropriate record keeping, this needs to be based upon a sensible consideration of the costs of record keeping. In the context of the current focus on the cost of financial advice, we believe that it is appropriate for this to be subject to further careful deliberation,” Phil Anderson, general manager for policy, advocacy and standards at the FAAA, said.

Regarding Class Order CO 14/923 Record-keeping obligations for Australian Financial Services licensees (AFSLs) when giving personal advice, it said: “The FAAA have for a long time advocated for greater regulatory capacity for financial advisers to rely upon their professional judgement, rather than the type of prescriptive record keeping obligations that are set out in this Class Order. 

“We suggest Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice, in its current form, is not a useful part of the legislative framework and should not be extended, other than as a short-term measure in a modified and simplified form.”

Regarding the other two aforementioned pieces, it said these are “excessively broad”. 

“Our opening position is that the current breach reporting regime is excessively broad and is capturing matters that are not worthy of being self-reported to ASIC or consuming ASIC’s focus and time.”

According to ASIC’s FY2022–23 annual report released last October, over 16,000 reports were made to ASIC under the reportable situations regime but almost three-quarters of these (71 per cent) were submitted by 21 licensees.
Some 88 per cent of these AFSLs who reported a breach had over $1 billion or more in reported revenue.
 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

1 month 3 weeks ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month 4 weeks ago

Interesting. Would be good to know the details of the StrategyOne deal....

2 months ago

SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positiv...

2 weeks 1 day ago

Original bidder Bain Capital, which saw its first offer rejected in December, has returned with a revised bid for Insignia Financial....

1 week 1 day ago

The FAAA has secured CSLR-related documents under the FOI process, after an extended four-month wait, which show little analysis was done on how the scheme’s cost would a...

6 days 8 hours ago

TOP PERFORMING FUNDS