Update on Red October Reform Blitz

AFA News 8 October 2021. October 2021 is probably the biggest month of regulatory change on record, with five key changes impacting financial advice at the one time. These changes include:

  • New Breach Reporting regime
  • Mandatory Reference Checking
  • APRA IDII Intervention measures phase 2
  • Design and Distribution Obligations
  • New Internal Dispute Resolution regime.

The new Breach Reporting regime commenced on 1 October 2021, and members looking to know more about this should refer to ASIC Regulatory Guide 78.

On 20 July 2021 ASIC issued a media release on the introduction of the new reference checking protocol that commenced on 1 October 2021.  As part of this media release, ASIC issued Info Sheet 257, that provides more background on the reference checking obligations.  Licensees now need to seek and also provide reference checks in accordance with the ASIC Protocol.  With the introduction of this new ASIC reference checking protocol, it is important to appreciate that the previous ABA Protocol has now been withdrawn and no longer applies.

On 16 September 2021, ASIC issued Info Sheet 264 as an FAQ on the Design and Distribution Obligations (DDO) for advice licensees and financial advisers. This info sheet sets out the primary obligations that apply to financial advice licensees and advisers as part of the commencement of the DDO regime on 5 October 2021. This information sheet also includes a reference to the legislative instrument that they have issued, which provides an exemption from what would have been a requirement to provide nil reports to product issuers on complaints and other information required, as part of the Target Market Determinations.  This was an important concession from the Government, that would have otherwise led to a lot of work for licensees, that would have been of no value to anyone. We were particularly concerned about the implications of this for small licensees with broad Approved Product Lists.

For any questions on the October 2021 reforms, please email policy@afa.asn.au

Issued 08.10.2021. AFA Policy & Education Update