Draft legislation for the creation of a single disciplinary body for financial advisers has revealed the government will aim to create an annual registration system for advisers who will no longer need to be registered with the Tax Practitioners Board (TPB).
Superannuation, Financial Services and the Digital Economy Minister Jane Hume today announced the release of the draft legislation, which also contains a timetable for the moves to the new body and the effective cessation of the functions of the Financial Adviser Standards and Ethics Authority (FASEA).
Senator Hume said the draft legislation will expand the role of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC) and allow it to exercise the functions of the single disciplinary body for financial advisers, a move which was first announced in December 2020.
Under a draft model, available on Treasury’s website, complaints will be directed to ASIC from a range of sources, including the Australian Financial Complaints Authority, TPB, industry associations, licensees and consumers, before the regulator passes relevant matters to the FSCP.
The draft legislation also contains a proposal to create new penalties and sanctions the panel can apply to financial advisers who have breached their obligations and will include bans, administrative sanctions and restricted civil penalties.
As part of the proposed changes, the draft legislation also contains provision for advisers to be registered annually, by their licensee, from 1 January each year and their registration details to be carried on ASIC’s Financial Advisers Register in order to be able to give financial advice. However, tax (financial) advisers will no longer need to be registered with both ASIC and the TPB, with the latter requirement ending from 1 January 2022.
The proposed legislation, which is slated to commence on 1 January 2022, will also implement the shift of FASEA’s standard-setting functions to the government minister administering the Corporations Act 2001 and its administrative standards functions transferred to ASIC.
Hume said the legislation “will strengthen oversight of financial advisers while simplifying the regulatory framework governing the provision of financial advice, helping to reduce complexity and cost for advisers”.
“This is part of the government’s ongoing commitment to ensure Australians have access to affordable and high-quality advice,” she said.
The draft legislation and explanatory material are available on Treasury‘s website and open to public feedback until 14 May.
