ASIC's new business name registration system could end up penalising advisers who discover they cannot register the same name as their dealer group, according to a financial services lawyer.
New business name registration requirements have created difficulties for authorised representatives who could face penalties for not registering the name of their business, The Fold Legal senior solicitor Jaime Lumsden Kelly told ifa.
“Where you have dealer groups that have large networks of authorised representatives, often those representatives use the dealer group’s name,” Ms Lumsden Kelly said.
“So that affects the representative because they then have the obligation to register that business name but they can’t because only one person is able to register a business name on the register,” she said.
“There are actually penalties attached to not registering the names, which is why we have raised the issue with ASIC.”
Ms Lumsden Kelly said ASIC’s business name registration system has not been designed and implemented in a way that recognises the underlying business practices.
“It can affect all financial planning franchisees,” she said.
The new business name registration requirements have also created unwelcome difficulties for white labelling.
“White labelling often involves permitting another business to use your business name: for example, if an insurer or a platform provider white labels a product for you, their product is likely to bear your business name,” Ms Lumsden Kelly said.
“But under new business name registration requirements, the product provider will be considered to be ‘carrying on business’ under your business name and will need to register the name on the ASIC Business Names Register,” she said.
“There are a few exceptions to the new rules, but none apply to white labelling.”
A number of advice and accounting industry associations have expressed their dis...
The adviser research house has announced its chief executive will step down in m...
New research has revealed the extent to which regulatory change is impacting adv...