The Australian Securities and Investments Commission (ASIC) has announced it plans to release regulatory guidance on the Future of Financial Advice (FoFA) reforms by 1 July 2012.
However, the regulator says that for the first 12 months of the implementation it will not look to strictly enforce the guidelines, providing the industry with ‘breathing room’ to introduce new processes and compliance regimes.
According to ASIC, provided industry participants are making reasonable efforts to comply with the reforms, it will adopt a measured approach where inadvertent breaches result from a misunderstanding of requirements or systems issues. However, where ASIC finds deliberate and systemic breaches, the Commission says it will take stronger regulatory action.
ASIC said the publication of its guidelines was subject to both FoFA bills passing Parliament prior to the intended reform implementation date of 1 July 2012.
Provided this date is met, ASIC aims to issue regulatory guidelines on the following:
- ASIC’s expectations for meeting the Best Interests duty
- Final guidance on the provision of scaled advice, taking into account the Best Interests duty
- The practical operation of the ban on conflicted remuneration and how ASIC will administer it
- Administrative action against financial services providers to reflect ASIC’s expanded powers to cancel or suspend an AFS licence and ban representatives
ASIC said it will also provide updates to existing regulatory documentation, but may not have this finalised prior to 1 July.
