The Australian Securities and Investments Commission has released a consultation paper outlining its proposed approach to approving and overseeing compliance schemes for financial advisers.
From 1 January 2020, each financial adviser who is authorised to provide personal advice to retail clients about relevant financial products must comply with a code of ethics and be covered by a compliance scheme under which their compliance with the code of ethics will be monitored and enforced. Compliance schemes must be approved by ASIC.
Incoming training and education requirements for financial advisers include obligations to comply with a code of ethics that is being developed by the Financial Adviser Standards and Ethics Authority (FASEA). Background.
The proposals in the consultation paper include:
- the process for applying for approval of a compliance scheme;
- ASIC’s expectations for the governance and administration, monitoring and enforcement processes, and ongoing operation of compliance schemes;
- how ASIC proposes to exercise its powers to revoke the approval of a compliance scheme and to impose or vary conditions on the approval;
- ASIC’s proposal to modify the law to ensure that monitoring bodies can gather the information from Australian Financial Services (AFS) licensees and authorised representatives that they need to carry out proactive monitoring activities; and
- draft guidance about the notifications that monitoring bodies must make to ASIC.
