AFSLs to be relieved from compliance scheme

Licensees will be given relief from financial adviser compliance scheme obligations under a new legislative instrument introduced by ASIC.

In a statement, ASIC said it will grant a three-year exemption to all AFSLs from the obligation in the Corporations Act 2001 to ensure that their financial advisers are covered by a compliance scheme, and from the associated notification obligations.

Last week, the government announced it would accelerate the establishment of a single disciplinary body for financial advisers which would displace the role of compliance schemes in monitoring and enforcing the Financial Planners and Advisers Code of Ethics 2019.

ASIC said the move was made to provide certainty for AFS 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 was originally required.


However, it also added that AFSLs will still be required to take reasonable steps to ensure that their advisers comply with the code from 1 January 2020, and advisers will still be obliged to comply with the code from that date onwards.

ASIC said licensees do not need to take any action at this time but will make a public announcement when the legislative instrument providing the exemption takes effect.

Both the AFA and the FPA abandoned their attempts to become a code monitoring body for the industry following the government’s announcement of the single disciplinary body for financial advice.

AFSLs to be relieved from compliance scheme
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Adrian Flores

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].

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