The Morrison Government has today released for consultation draft legislation and explanatory material to implement Recommendation 2.10 of the Financial Services Royal Commission and establish a new disciplinary system for financial advisers.
The draft 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.
The draft legislation expands the role of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC) to exercise the functions of the single disciplinary body for financial advisers. It proposes to create new penalties and sanctions to apply to financial advisers found to have breached their obligations and introduces a new annual registration system for financial advisers.
Further streamlining and supplementing the new disciplinary system, the draft legislation implements Recommendation 7.1 of the Independent Review of the Tax Practitioners Board (TPB), by introducing a single disciplinary and registration system for financial advisers who also provide tax (financial) advice services. The draft legislation removes the requirement for tax (financial) advisers to be registered with the TPB, and ensures relevant tax experts are appointed to the FSCP to hear disciplinary matters that involve tax-related advice.
This will provide welcome relief to tax (financial) advisers who are currently subject to duplicate regulation and oversight.
The draft legislation also implements the Government’s announcement last year that the Financial Adviser Standards and Ethics Authority (FASEA)’s legislative standard-setting functions will be transferred to the Minister administering the Corporations Act 2001 and its administrative standards functions transferred to ASIC.
These reforms simplify the regulatory framework governing the provision of financial advice by streamlining the number of bodies involved in the oversight of financial advisers, while at the same time strengthening that oversight to ensure that advisers engaged in misconduct are appropriately disciplined under one system.
The exposure draft legislation and explanatory material are available on the Treasury Consultation Hub.
Submissions are invited by Friday 14 May 2021 and can be sent to SDBconsultation@treasury.gov.au.
Jane Hume
Minister for Superannuation, Financial Services and Digital Economy
Minister for Women’s Economic Security