The requirement for ASIC to give warnings and reprimands to financial advisers in specified circumstances was introduced by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act).
And on Thursday, the corporate regulator released an information sheet explaining what warning and reprimands are; when it will give a warning or reprimand; how it will communicate the giving of a warning or reprimand; when and to whom it will provide procedural fairness before issuing a warning or reprimand; and the adviser’s right of review of ASIC’s decision.
Within the information sheet, ASIC explained that generally, a warning will warn a financial adviser against continuing the conduct or circumstances that led to ASIC giving the warning, whereas a reprimand will admonish the financial adviser in relation to the conduct or circumstances that have already ceased.
The corporate regulator assured that “not every concern brought to ASIC’s attention which indicates that one of the warning or reprimand circumstances may exist will lead to ASIC giving a warning or reprimand”.
“We will still conduct our usual triage, investigatory work and referral process,” it confirmed.
Circumstances where ASIC must give a warning or reprimand include contravention of financial services law that it does not believe to be serious; refusal or failure to implement an AFCA determination; officer of corporations that are unable to pay their debts; and non-compliance with a Tax Practitioners Board (TPB) order.
The corporate regulator also advised that a warning or reprimand will be in the form of a letter sent to a financial adviser electronically, and will contain a statement of reasons for ASIC’s decision.
Moreover, it noted that warnings and reprimands will not be recorded on the Financial Advisers Register and that it will generally not publish the names of the financial advisers who we warn or reprimand.
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Rules of Bureaucracy. Rule #1: Maintain the problem at all costs! The problem is the basis of power, perks, privileges, and security.
I’m so happy that they are simplifying everything for me. More Fact Sheets and useless information that ASIC will ignore if it doesn’t suit them but which means accounting looks like a better career path for any graduate.
In the spirit of writing clearly and concisely, why do they need an information sheet to explain the difference between a warning and a reprimand. This seems like they have done this to create more work for themselves and at the same time make it all just a little bit more confusing…especially when at the end of the day if you are a small AFSL you will be thrown under the bus and if you are AMP or an Industry fund you will be asked not to do it again.
And will ASIC backdate actions that could/should have been covered by warnings and reprimands prior to someone calling them out on their ridiculous “why not litigate” strategy that has seen countless good advisers ruined financially, reputationally, mentally, emotionally and physically over the years for issues that should never have resulted in banning orders?
Depends who they work for.
Now if they could just give us a flowchart to show what happens at AFSL level. ie. Small AFSL = banning & complete crushing of all invovled, big AFSL = a fine, industry super fund AFSL = move on, nothing to see here
And who warns ASIC when they stuff up. Pot calling the cattle black
When ASIC stuff up and are called out on it, they generally just ignore the matter and any evidence supplied to them. When they screw up and complaints are made, they simply state that evidence or statements that are not in their favour are “not relevant” and the case goes no further. They’re happy to spend a fortune in taxpayer funds to double-down and cover themselves, dragging advisers and companies through costly legal battles, where the small individuals can’t sustain the cases and pursue justice against the behemoth with bottomless pockets.