The Financial Adviser Standards and Ethics Authority is to be dismantled, with its existing brief of responsibilities split between ASIC and the Treasury.
This announcement was made in a joint statement released by the Federal Treasurer, Josh Frydenberg and Assistant Minister for Financial Services, Superannuation and Financial Technology, Senator Jane Hume.
Under the theme of ‘…simplifying the regulatory framework applying to financial advisers’, the release addressed Banking Royal Commission recommendation 2.10, which calls for a single, central disciplinary body to be established for financial advisers.
The Government says it will give effect to this recommendation by expanding the operation of the ASIC-controlled Financial Services and Credit Panel, which currently supports the regulator in the exercise of its regulatory functions with respect to the making of banning orders against individuals for misconduct.
The statement notes that expanding the role of the FSCP will leverage its extensive expertise and existing governance structures, thereby avoiding the need to establish a new body to perform this role.
Consolidating this new function …is also intended to avoid regulatory overlap
Consolidating this new function within ASIC is also intended to “…avoid regulatory overlap and minimise the possibility of multiple investigations by multiple agencies into the same conduct related to the provision of financial advice.”
The Government will move FASEA’s standard-making functions and responsibilities to the Treasury, while it says the remaining elements of the authority’s role, including administering the FASEA Adviser Exam, will be incorporated into the FSCP’s expanded mandate.
these reforms …will further streamline the number of bodies involved in the oversight of financial advisers
In stating these reforms “…will further streamline the number of bodies involved in the oversight of financial advisers,” the Government notes this results in FASEA being wound up.
Legislation that will give effect to these changes is intended to be introduced into Parliament in the first half of 2021.
Summarising this announcement, which also covered other reforms recommended by the Banking Royal Commission, the statement says the Morrison Government is committed to continuing to improve the regulatory framework applying to the financial advice sector and ensuring that Australians can get access to affordable advice to help them plan for their future.