Compliance. ASIC RGs

Compliance - general provisionsDigital - adviceDigital - disclosuresDigital - discussion sitesDigital - using calculatorsAdvice - example SoA Advice - facts, general, scaledAdvice - product adviceAdvice - disclosing feesAdvice - fee disclosureAdvice - dollar disclosureAdvice - past performanceAdvice - adviser dutiesAdvice - PDSAdvice - MDAsConflicts - conflicted remunerationConflicts - managing conflictsConflicts - dispute resolutionBreaches - breach reportingBreaches - remediationBreaches - compensationBreaches - enforceable undertakingsAdvertising

Compliance

The RGs must be seen in the context of the following general provisions;

Corporations Act

Best interests duty and related obligations (Div 2 of Pt 7.7A)

An advice provider must:

  • act in the best interests of its clients in relation to the advice;
  • only provide advice if, in light of the actions the advice provider
  • should have taken to comply with the best interests duty, it is reasonable to conclude that the resulting advice is appropriate for the client;
    • give a warning to the client if it is reasonably apparent that the advice is based on incomplete or inaccurate information about the client’s objectives, financial situation or needs; and
    • generally prioritise the interests of the client over its own interests and those of some of its related parties.
      Complying with the best interests duty and related obligations does not affect whether the conflicted and other banned remuneration provisions have been complied with. The best interests duty and related obligations and the conflicted and other banned remuneration provisions impose separate obligations on an AFS licensee and its representatives.

An AFS licensee and its representatives must:

  • give the client an annual fee disclosure statement outlining information about the fees paid and the services received by the client over the previous year; and
  • only charge an ongoing fee if the client ‘opts in’ to continue the ongoing fee arrangement every two years. This opt-in requirement applies unless ASIC is satisfied that the licensee or its representatives are bound by a code of conduct that, among other things, obviates the need for complying with the opt-in requirement in the Corporations Act.

If you are an AFS licensee, you have general obligations under s912A(1) of the Corporations Act to:

  1. do all things necessary to ensure that the financial services covered by your licence are provided efficiently, honestly and fairly (s912A(1)(a));
  2. have adequate arrangements in place for managing conflicts of interest (s912A(1)(aa));
  3. comply with the conditions on your licence (s912A(1)(b));
  4. comply with the financial services laws (s912A(1)(c));
  5. take reasonable steps to ensure that your representatives comply with the financial services laws (s912A(1)(ca));
  6. have adequate financial, technological and human resources to provide the financial services covered by your licence and to carry out supervisory arrangements (s912A(1)(d)).
  7. maintain the competence to provide the financial services covered by your licence (s912A(1)(e));
  8. ensure that your representatives are adequately trained and competent to provide those financial services (s912A(1)(f));
  9. if you provide financial services to retail clients, have a dispute resolution system (s912A(1)(g)); and
  10. establish and maintain adequate risk management systems (s912A(1)(h)).

ASIC Regulatory Guidelines

Below are Regulatory Guidelines (RGs) examining;

  • Reviewing personal advice and initiating remediation (RG 256)
  • Providing digital advice (RG255)
  • Conflicted and banned remuneration (RG246)

RG 255 Providing digital financial product advice

Issued 30 August 2016

 

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RG 221 Facilitating digital financial services disclosures

Issued 29 March 2016

 

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RG 162 Internet discussion sites (IDS)

Issued 15 August 2000

Amended 4 July 2007

 

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RG 167 Caculators

Issued 1 April 2020

 

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RG 90 Example Statement of Advice: Scaled advice for a new client

Issued 7 December 2017

 

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RG 244 Giving information, general advice and scaled advice

Issued 13 December 2012

 

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RG 36 Licensing: Financial product advice and dealing

Issued June 2016

 

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RG 97 Disclosing fees and costs in PDSs and periodic statements

 

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RG 245 Fee disclosure statements

Issued 22 February 2017

 

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RG 182 Dollar disclosure

Issued 5 December 2017

 

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RG 53 The use of past performance in promotional material

Issued 1 July 2003

 

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RG 175 Licensing: Financial product advisers—Conduct and disclosure

Issued 14 November 2017

 

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RG 168 Disclosure: Product Disclosure Statements (and other disclosure obligations)

Issued 28 October 2011

 

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RG 179 Managed discretionary accounts

Reissued 29 September 2016

 

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RG 246 Conflicted and other banned remuneration

Issued 10 December 2020

 

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RG 181 Managing conflicts of interest

Issued 30 August 2004

 

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RG 165 Licensing: Internal and external dispute resolution

Reissued 30 July 2020

 

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RG 78 Breach reporting by AFS licensees

Issued 30 March 2020

 

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RG 256 Client review and remediation

Issued 15 September 2016

 

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RG 126 Compensation and insurance arrangements for AFS licensees

Issued 27 July 2020

 

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RG 100 Enforceable undertakings

Issued 19 February 2015

 

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RG 234 Advertising financial products and services

Issued 15 November 2012

 

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