Reporting of other licensees excluded from breach data
Questions have been raised why reporting by other licensees was excluded from the regulator’s first breach publication.
In its recent report, the Australian Securities and Investments Commission (ASIC) said the matter, which had been a controversial issue for advisers and licensees in the lead-up to the reportable situations regime implementation, was “outside the scope of ASIC’s legislative reporting obligation”.
Last year, the regulator stated a licensee must report to ASIC: “Where a licensee has reasonable grounds to believe that a reportable situation has arisen in relation to any other licensee, that licensee must report this to ASIC within 30 days.
“A copy of the report will also need to be provided to the other licensee. This does not apply if there are reasonable grounds to believe that ASIC is already aware of the reportable situation.”
However, there are questions why these statistics were then excluded from the data publication.
Brian Pollock, director of corporate governance at The Principals Community, said he would be keen to see this information included in a future release. The lack of information currently made it impossible to tell if there had been multiple reports or whether any had been made at all.
“This was a contentious issue and the industry expected a lot of pressure so it would be very insightful to see how it played out," he said.
“I would be interested to see what things they are reporting others on, how is the industry holding the profession to account, is it actually happening? You would have to report your peers and notify them that you had done so, there would be a lot of legal pressure if you got that wrong.
“Just because something is ‘beyond the scope’, that doesn’t mean the regulator can’t make a comment on it. It would put licensees on notice that people are making these reports.”
Pollock said he would also like to see more information in future releases on what went wrong in the specific breaches and how they could be rectified.
“There was a lack of examples or case studies, it was very much factual and not much advisers can use to improve their businesses.”
ASIC has been contacted for comment.
AUTHOR
Laura Dew
Recommended for you
The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call.
Two national advice businesses have merged to form a leading holistic advice business with $2.5 billion in funds under management.
Insignia Financial has completed its transition of a range of administration and technology functions to SS&C Technologies as it seeks to be a leading wealth manager by 2030.
ASIC has permanently banned a financial adviser after he allegedly concealed information from clients and misused client funds, among other breaches.
I reported what I suspected to be breaches by ARs of other Licensees to my then Licensee over several years. the response was always the same. Not interested. Yet, if I recall correctly, my AR Agreement required me to do just that. I'm glad of the industry.