Questions remain regarding the implementation of FASEA’s code of ethics, with adviser groups continuing to push for a delay to the January 1st starting date because of key issues that are yet to be clarified. Meanwhile, ASIC announced that licensees would not be in breach of the law if their advisers were not able to register with an ASIC-approved compliance scheme by the same date. However - they will have to ensure advisers comply with the code.
Relief On The One Hand…
A notice published on ASIC’s website, said “ASIC has taken action to provide certainty to Australian financial services licensees that they will not be in breach of the law because their financial advisers were not able to register with an ASIC-approved compliance scheme by 1 January 2020, as originally required.” ASIC announced a three-year exemption to all AFS licensees from the obligation of ensuring that their financial advisers are covered by a compliance scheme and from the associated notification obligations. It will create a new legislative instrument putting this relief into effect.
Responsibility On The Other
While AFSL holders were relieved to get the official announcement after ASIC made a statement indicating this would occur last month, ASIC reiterated that the code of ethics would come into force, as scheduled, on 1 January, next year. As an interim measure, from Jan 1 AFSLs will still be required to take reasonable steps to ensure that their advisers comply with the code from 1 January 2020, as advisers will still be obliged to comply with the code from that date onwards. In a warning to licensee’s regarding their responsibility to monitor advisers code compliance, the government said that ASIC “will be able to take action against licensees that fail to do so”
Last month, the government announced that it was “accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers” and that it would “work towards establishing the new body in early 2021”. The 3-year extension just announced raises further questions about the future timing and establishment of the framework and whether it is expected to be completed in the time that the government had originally hoped.
Delay the Code?
Regarding the Code itself – although it is still due to come into effect in less than 6 weeks, there is still hope from some sections of the industry that this date will too be extended. Money Management reported today that the Assistant Minster for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, has received a letter from adviser groups formally requesting a delay in implementation of code until key issues have been resolved.
AFA general manager policy and professionalism, Phil Anderson said that the bottom line for both FASEA and the industry was that serious questions remained with respect to the code of ethics and that time was running out to resolve the issues ahead of the 1 January 2020 implementation date.