- Advocacy
Page updated on 21 October 2019
Despite satisfying ASIC’s requirements and receiving in-principle approval, the Associations that were working to establish a code monitoring body have withdrawn the application for Code Monitoring Australia (CMA).
The driving force behind CMA was our strong belief that it’s in the best interests of the profession and consumers to have one compliance scheme run by professional associations, rather than a commercial provider.
However following recent discussions, the Government has now confirmed that it will progress a single disciplinary body as recommended by Commissioner Hayne in the Financial Services Royal Commission in place of Code Monitoring.
Given this, we do not think that it is prudent to establish CMA as a new monitoring scheme that will be superseded within a short period, resulting in a duplication of costs and compliance obligations for our members and financial advisers generally.
What does this mean for you?
As there will not be an approved code monitoring scheme in place on 15 November 2019, the Government has been requested to take immediate action to relieve financial advisers of the requirement to register.
Do I still need to comply with the FASEA Code of Ethics?
Yes, the FASEA Code of Ethics will still come into force on 1 January 2020 and you need to make sure your business practices are compliant.
On 18 October, FASEA released their Code of Ethics Guidance. This document aims to assist stakeholders in understanding, interpreting and applying the Code. For more information, click here.
Do I need to register with a code monitoring body?
ASIC is considering the steps it needs to take to ensure that licensees do not breach the law by not registering advisers with a code monitoring body from 1 January 2020. ASIC will provide an update on the steps it will take shortly.
When will the new disciplinary body be created?
The Government is working towards establishing the new body in early 2021, subject to the passage of legislation.
There will be a consultation and design process that will run into 2020. The SMSF Association will work closely with the Government to ensure the new body is effective and does not place excessive burden on financial advisers.
Is there guidance available for financial advisers on the Code of Ethics?
No, we are still awaiting a guidance document from FASEA on the Code of Ethics. We are advocating strongly that FASEA should release this guidance as soon as possible and commit to working with the SMSF Association and other relevant associations to resolve some of the uncertainty and difficulty that exists in the current Code.
We will continue to advocate for the Code of Ethics to be practical and workable for financial advisers. Further, we will work with the Government on establishing its new disciplinary body and ensuring our members’ interests are strongly represented.
Further updates and information will be provided as soon as they are available.