Professionalism
Policy and Advocacy ,VW` bMOopdb General Manager Policy & Professionalism AFA
Regulatory reform in 2021 has continued at an intense pace, peaking in early October with the /OM $KsdJOo `Ws dT oOTdoapº yOb JO|dbM sVBs MBsO sVO TdKtp VBp oOaBWbOM db sVO bB`WpBsWdb of the Royal Commission recommendations, and the related impact upon the FASEA exam. With the Single Disciplinary Body legislation now passed and the Compensation Scheme of Last Resort legislation tabled in the Parliament, we can soon hope to see an end to this tidal wave of Royal Commission driven reforms. Please read this article to understand all that has happened in recent months and what is in front of us still. 2VO bBbKWB` BMyWpOo aBo_Os VBp KdbsWbtOM sd MOK`WbO sVodtUVdts » zWsV sVO sdsB` btaJOo dT bBbKWB` BMyWpOop db sVO WbBbKWB` MyWpOo /OUWpsOo Ì /Í bdz pOOaWbU`| TB``WbU JO`dz » BbM zWsV sVO ops {Ba MOBM`WbO ÌTdo sVdpO zVd VByO bds BssOalsOM Ws Bs `OBps szWKOÍ Bs sVO end of 2021, we are expecting to see this number decline further. It will be interesting to see how many advisers qualify for the extension of the exam deadline until 30 September 2022.
Single Disciplinary Body, FASEA and the Exam
Regulatory reform in 2021 has continued at an intense pace, peaking in early October with the Red October Blitz of reforms.
On 24 June 2021, the Government tabled the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021, which enabled the introduction of a Single Disciplinary Body (SDB), the winding up dT 0 BbM sVO oOadyB` dT bBbKWB` BMyWpOop from the TASA/TPB regime. The Bill also included provisions to enable the Government to issue a regulation to provide a further extension to the FASEA Exam deadline. The Better Advice Bill was subject to an inquiry by the Senate Economics Committee (SEC), which the AFA made a submission to. Our focus was on the importance of ensuring that the Financial Services and Credit Panel (Panel) was focussed on serious misconduct and not just a large and unmanageable list of minor and administrative matters. We also sought an option for ASIC to take no further action where they choose not to refer a matter to a Panel. We also raised concerns about the complexity of the way in which advisers had been removed from the TASA/TPB regime. Disappointingly, our issues were not picked up and the SEC made no recommendations for material change. The Better Advice Bill was passed in the House of Representatives on 4 August 2021, however it was held up in the Senate as the cross bench and the opposition wanted to see the related regulations before debating the Bill. The Government issued a proposal paper on the regulations in August to address what matters ASIC must refer to a Panel and what disciplinary actions must be recorded on the Financial Adviser Register. The Government then issued draft regulations for consultation on 29 September 2021, with submissions due by 15 October 2021. The release of the draft regulations seemingly opened the way for the Bill to be debated in the Senate and it was ultimately passed on 21 October 2021.
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The Financial Adviser | December 2021
9O BoO bdz BzBWsWbU sVO bB` yOopWdb dT sVO regulations that will address the following: • Which disciplinary matters must be referred to a Panel. • What disciplinary actions must be recorded on the FAR. • The training and education requirements Tdo sB{ Ì bBbKWB`Í BMyWpOopº • The provision for an extension of the FASEA Exam deadline to 30 September 2022. Whilst we are pleased that the Government VBp d OoOM Bb O{sObpWdb Wb sVO {Ba MOBM`WbO for those who have attempted the exam at least twice by the end of this year, we are conscious that at this point prior to the results of the November exam, there are probably BodtbM BMyWpOop zVd zW`` JObO s Toda this. Our analysis of the numbers prior to the November exam suggested that there were 1,400 advisers who have sat the FASEA exam only once and around 2,200 who have not attempted the exam at all. We expect a larger number to attempt the November exam and sVWp aB| BMM pWUbW KBbs`| sd sVdpO zVd lBpp or access the extension.
Other Royal Commission recommendations After issuing a proposal paper on the Compensation Scheme of Last Resort in July 2021, the Government tabled the Bill in the House of Representatives on 28 October 2021. 2VO pKdlO dT sVO pKVOaO Wp `WaWsOM sd bBbKWB` advice, securities dealing, the provision of credit and mortgage broking. The proposal lBlOo ptUUOpsOM sVBs bBbKWB` BMyWpOop zdt`M end up paying more than three quarters of the cost of the scheme. There remains some debate about the narrow scope of the scheme, particularly with respect to the exclusion of managed investment schemes, and this could cause complications in getting it through the Senate. The CSLR is proposed
