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ASIC provides accountants with advice limits

The Australian Securities and Investments Commission (ASIC) has released its latest information sheet for accountants who provide services to SMSFs.

Information Sheet 216 “AFS licensing requirements for accountants who provide SMSF services” (INFO 216) covers how the Australian financial services licence (AFSL) regime applies to SMSF services provided by accountants.

INFO 216 sets out the various SMSF services an accountant might provide and whether a licensing exemption applies to them, or whether an accountant must be covered by an AFSL for those services.

It provides an overview of the other types of SMSF services accountants without an AFSL can provide and whether a licensing exemption applies.

For example, when it comes to establishing, operating, structuring or valuing an SMSF, including advice and assistance on administrative and operational issues, and the process of winding up or exiting an SMSF, the regulator stated accountants without an AFSL “may provide advice on these areas, as long as they give their client the appropriate warnings”.

This includes advice provided for the sole purpose of, and only to the extent reasonably necessary for, ensuring compliance with the superannuation legislation and advice on the process of winding up or exiting an SMSF.

However, within these types of SMSF services, the regulator stated an unlicensed accountant “may not recommend that their client acquires or disposes of an interest in an SMSF”.

INFO 216 also provides accountants with a table for licences required for specific types of recommendations, including a specific product, a particular class of shares, a certain proportion of international shares and shares that may have franked dividends.

“ASIC’s primary role in relation to SMSFs is to regulate the gatekeepers – the accountants, financial advisers and SMSF auditors,” ASIC deputy chairman Peter Kell said.

“We think that accountants and financial advisers have a critically important role to ensure that only those investors for whom an SMSF is suitable go into the SMSF sector, and in doing so are fully informed.”

The exemption, which allowed recognised accountants to give financial advice about acquiring or disposing of an interest in an SMSF, was repealed on 1 July 2016 and accountants need to be clear about which services must be covered by a licence and which remain exempt.

The corporate regulator said INFO 216 would assist accountants in understanding which services do and do not require them to be covered by an AFSL.

ASIC has also modified Corporations Regulation 7.1.29(4)(c)(ii) to ensure accountants can continue to provide taxation advice on financial products not covered by their licence in ASIC Corporations (Recognised Accountants: Exempt Services) Instrument 2016/1151.

INFO 216 can be found here.

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