The Australian Securities and Investments Commission (ASIC) has issued guidance on its proposed approach to approving and overseeing compliance schemes for advisers, and how it expects a scheme to operate on an ongoing basis.
Released today, “Regulatory Guide 269: Approval and oversight of compliance schemes for financial advisers (RG 269)” covers the financial advice professional standards reforms.
This includes obligations for advisers to, from 1 January 2020, comply with a code of ethics and be covered by an ASIC-approved compliance scheme under which their compliance with the code of ethics will be monitored and enforced.
RG 269 explains ASIC’s process and criteria for determining whether to grant approval to a compliance scheme.
It also sets out the corporate regulator’s expectations for the governance and administration, monitoring and enforcement processes, and ongoing operation of compliance schemes, as well as how it will exercise its powers to revoke the approval of a compliance scheme and to impose or vary conditions on the approval.
The guidelines also state the notifications that monitoring bodies must make to the regulator.
The code of ethics is being developed by the Financial Adviser Standards and Ethics Authority (FASEA).
Consultation on the draft code released by FASEA closed on 1 June.
ASIC said if there are significant changes from the draft code, it may need to revise its guidance when the final code is released.
Deputy chair Peter Kell said ASIC is committed to ensuring robust, transparent, fair and consistent compliance schemes that effectively monitor and enforce compliance with the code of ethics.
“Effective compliance schemes are a key component of the reforms that will require higher standards of ethical behaviour and professionalism among financial advisers,” Kell said today.
“Our guidance requires high standards for compliance schemes, reflecting the significant responsibility that monitoring bodies operating compliance schemes will have.
“This includes the responsibility to effectively monitor and sanction adviser members if required.”
