AFA News 12 August 2021. On Friday 6 August 2021, the Government released a discussion paper on the proposed regulations on two key points related to the Single Disciplinary Body, including matters to be referred to a panel and reporting outcomes on the Financial Adviser Register.

The importance of the regulations for the single Disciplinary Body became increasingly important when Senator Rex Patrick signalled an intention to seek a deferral of the deliberation on the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021 until a time when the regulations are released.  On Monday 9 August 2021, the ALP signalled an intention to support the Senator Patrick amendment.  We will need to wait to see how this plays out in the Senate.

The Bill provides for regulations to be set by the Government in a number of key areas, including the following:

• The circumstances where ASIC must refer a matter to a Financial Services and Credit Panel,
• The circumstances under which a disciplinary outcome emerging from the Single Disciplinary Body by either ASIC or a Panel must be published on the Financial Adviser Register,
• Education and training requirements for tax (financial) advisers, and
• The circumstances under which advisers can get an extension with completion of the FASEA Exam.

This Single Disciplinary Body Policy Paper is seeking feedback on:

• The circumstances where ASIC must refer a matter to a Financial Services and Credit Panel.
• The circumstances under which a disciplinary outcome emerging from the Single Disciplinary Body by either ASIC or a Panel must be published on the Financial Adviser Register.

The Policy Paper proposes a set of criteria that define which matters must be referred to a Panel, however, it also envisaged that breaches of the CPD standard and the Code of Ethics would not be referred to a Panel unless they met other defined criteria.

In terms of which matters should be recorded on the FAR, the proposal is that this should exclude written warnings and reprimands, however, include the following:

1. a written direction by the FSCP to undertake specified training;
2. a written direction by the FSCP to receive specified counselling;
3. a written direction by the FSCP to receive specified supervision;
4. a written direction by the FSCP to report specified matters to ASIC; or
5. a written registration suspension or prohibition order by the FSCP.

Other matters such as court declarations of contraventions of a restricted civil penalty provision, enforceable undertakings and infringement notices would also be included on the register, however, these are already mandated in the legislation.

The consultation on the Single Disciplinary Body Policy Paper is open until Friday 20 August 2021.  Please click here to view a copy of the policy paper.  Please click here for a copy of the flow chart.  We encourage licensees and members to make submissions.

For more information on the Single Disciplinary Body and the proposed regulation, please email policy@afa.asn.au.