AFA releases Single Disciplinary Body Submission

AFA News 26 May 2021. On Friday 14 May 2021 the AFA provided our submission to Treasury in response to the exposure draft legislation on the Single Disciplinary Body (SDB). This is one of the last pieces of the legislation emanating from the Royal Commission recommendations.

This exposure draft reflects Recommendation 2.10 on a Single Disciplinary Body and follows the Government’s announcement in October 2019 to cancel the idea of Code Monitoring Bodies, which was part of the 2017 Professional Standards for Financial Advisers legislation.

The exposure draft proposes setting up a new regime to administer and action disciplinary matters for financial advisers and will include the utilisation of the existing Financial Services and Credit Panel to consider matters.  The personnel involved in these panels will include an ASIC Chair and two industry people.  This facilitates something similar to a peer review model.

Consistent with our earlier statements about the new breach reporting regime, we are particularly concerned about the fact that the exposure draft will see the SDB looking at some of the most minor and administrative matters.  This is as a result of the draft legislation suggesting that the SDB will look at all breaches of the law and breaches of the FASEA standards and Code of Ethics.  This will mean that the SDB will be looking at a large number of matters, most of which are minor or administrative, like inadequate record-keeping on compliance with the Best Interests Duty Safe Harbour steps or errors or delays in the provision of Fee Disclosure Statements.

As a direct result, we are very concerned about the cost of running this system, particularly in the context of the recent substantial increases in the ASIC Funding Levy.  There will also be a new ASIC registration fee for financial advisers.

We have made a number of recommendations, including that minor and administrative matters should not be reported to the SDB, that there should be greater clarity on the penalties that might apply, that there should be no separate education and training standard for tax (financial) advisers and that changes should be made to the Governance model.

Please click here to access a copy of the AFA submission on the Single Disciplinary Body.

For any questions, please email

Issued 26.05.2021. AFA Policy & Education Update