The Australian Securities and Investments Commission (ASIC) may be the body to deliver an extension to the adviser exam deadline if legislation proposed by the government fails to pass through parliament before it sits again in August.
In a note to members, the Association of Financial Advisers (AFA) stated it seemed unlikely the Treasury Laws Amendment (2019 Measures No 3) Bill, which contains the provisions to extend the time provided to complete the FASEA exam until the end of 2021, would pass through parliament due to the addition of late amendments.
In that note, AFA chief executive Phil Kewin also told members the association was examining other channels, which according to AFA policy and professionalism general manager Phil Anderson could include an exemption to the requirements to meet professional standards obligations that would be granted by ASIC.
Anderson told selfmanagedsuper that according to the explanatory memorandum to the Professional Standards Bill, under Section 926A of the Corporations Act, ASIC had exemption and modification powers that apply in the case of the professional standards legislation.
Paragraph 2.53 of the explanatory memorandum states these powers apply to the transitional arrangements for existing advisers and thus would include exam deadlines, he said.
He also pointed out paragraph 2.55 states “ASIC has used its exemption and modification power to provide administrative relief in circumstances where the strict operation of the Corporations Act produces unintended or unreasonable outcomes”.
“Given the delay in the availability of the FASEA exam, the government policy announcement of an extension in August 2019 and the impact of the coronavirus, we can certainly argue that in the absence of an extension it would result in unintended and unreasonably outcomes,” he said.
“Separately, we would also argue that the government has regulation powers through section 926B of the Corporations Act that they could employ,” Anderson added, noting this section allows for the creation of an exemption or modification by ministerial regulation, compared to section 926A which gives the same power to ASIC.
He said that it was possible for the bill to be passed in December and receive royal assent before the end of the year but advisers could not be expected to rely on this taking place sometime in the future when they required certainty about the exam timetable in the present.
“We had to consider other avenues, and have been talking for about a month with the government, as advisers can’t hold their breathe on this issue as they wait for the legislative processes to be played out.”
