The Australian Securities and Investments Commission (ASIC) has eliminated an anomaly in the exempt services rules regarding tax advice that will now enable Australian financial services (AFS) licensees to comply.
Under regulation 7.1.29(4) of the Corporations Regulations, unlicensed accountants could provide tax advice even if it involved financial products.
The only requirement regulation 7.1.29(4)(c)(ii) stipulated was for practitioners finding themselves in this situation to issue a written warning to the client stating the person providing the advice is not licensed to give financial product advice.
The corporate regulator recognised a problem existed with the legislation as limited licensees could not use the original exemption because they could not provide the advice under their licence nor could they lawfully inform the client they were not licensed to provide financial advice.
To address the problem, it issued “ASIC Corporations (Recognised Accountants: Exempt Services) Instrument 2016/1151”, but did not include an allowance for full AFS licence holders or their authorised representatives.
The instrument has now been amended so accountants operating without a licence, practising under a limited licence or providing advice as a full AFS licence holder or authorised representative of a full AFS licence holder can all comply with the Corporations Regulations.
“The amendments enable full AFS licensees (and their authorised representatives) to provide a modified warning under sub-paragraph 7.1.29(4)(c)(ii) which states that: (a) the person providing the exempt advice does not have the authorisation to provide this advice; (b) taxation is only one of the matters that must be considered when making a decision about a financial product; and (c) the client should consider taking advice from an AFS licensee with the appropriate authorisation before making a decision on the financial product,” it said.
“Information Sheet 2016 AFS licensing requirements for accountants”, which is a guide for accountants as to the SMSF services they can provide under the new licensing regime, has also been updated to reflect the amendment to the instrument.
