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ASIC releases FOFA codes guidance

The Australian Securities & Investments Commission will now consider applications for approval of Future of Financial Advice codes, providing a "flexible alternative to complying with the opt-in requirement," though single entity codes will not be considered.

The much-anticipated guidance confirms that ASIC will accept an application for approval of a code with limited content - for the purposes of FOFA only - offering a checklist of code content that "obviates the need" for complying with the opt-in requirment.

"A FOFA code approved under our policy will provide a flexible alternative to complying with the opt-in requirement," said ASIC Commissioner Peter Kell.

"In particular, under a FOFA code ongoing client arrangements may not terminate in the same way that they do under the law."

However, the guidance also makes clear that "approved FOFA codes must meet substantially the same policy objective as opt-in: that is, they must promote client engagement and ensure clients do not pay ongoing financial advice fees where they are receiving little or no service."

ASIC will publish guidance on the FOFA conflicted remuneration provisions on Monday 4 March.