The Financial Sector Reform Amendment (Hayne Royal Commission Response—Better Advice) Regulations 2021 have been introduced to support the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021. Background.

The Better Advice Act:

•  expands the role of the Financial Services and Credit Panel  within ASIC to operate as the single disciplinary body for financial advisers to ensure that less serious misconduct does not go unaddressed;
• creates new penalties and sanctions for financial advisers who have breached their obligations under the Corporations Act;
• introduces a new registration system for financial advisers to improve the accountability and transparency of the financial services sector; and
• transfers functions from the Financial Adviser Standards and Ethics Authority (FASEA) to the Minister responsible for administering the Corporations Act and to ASIC to streamline the regulation of financial advisers; and
• introduces a single registration and disciplinary system for the provision of tax (financial) advice services.

The Regulations amend the Australian Securities and Investments Commission Regulations 2001, the Corporations Regulations 2001 and the Tax Agent Services Regulations 2009 to:

• prescribe criteria for when ASIC must convene an FSCP;
• set allowances for witnesses summoned to appear at a hearing of an FSCP;
• provide that specified civil penalty provisions are not taken to be significant (and therefore may not be reportable) under the breach reporting regime;
• prescribe sanctions that must be included on the Register of Relevant Providers;
• provide for the Minister to be able to delegate the functions and powers to approve foreign qualifications to officers in the Department of Treasury;
• extend the deadline for certain existing providers to pass the financial adviser exam;
• set requirements (including eligibility criteria, fees and transitional provisions) for non-relevant providers (individuals, companies and partnerships) who provide tax (financial) advice services to be registered as tax agents under the TAS Act; and
• make consequential amendments to the Tax Agent Services Regulations 2009 to remove references to tax (financial) advisers and recognised tax (financial) adviser associations.

Consultation resulted in the following changes to the Regulations:

• postponing the requirement for existing tax (financial) advisers to be registered as tax agents from 1 October 2022 to 1 January 2023;
• creating a new pathway for members of recognised tax agent associations to be registered as tax agents in order to provide tax (financial) advice services; and
• providing for recognised tax (financial) adviser associations to be deemed as recognised tax agent associations from 1 January 2022.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.