The Association of Superannuation Funds of Australia (ASFA) has welcomed ASIC’s softer approach to compliance with the government’s Future of Financial Advice (FOFA) reforms.
ASIC yesterday said financial advisers would have until 1 July 2013 before strict regulatory action kicked in, a full year later than the deadline set out in the government’s draft legislation.
The corporate regulator said it would adopt a “facilitative compliance approach” until then.
“That is, provided industry participants are making reasonable efforts to comply with the FOFA reforms, ASIC will adopt a measured approach where inadvertent breaches result from a misunderstanding of requirements or systems issues,” the regulator said, adding deliberate breaches would draw stronger action.
ASFA chief executive Pauline Vamos said the peak superannuation body was very pleased to see ASIC taking a practical approach to the reforms.
Financial advice and superannuation bodies have called for more time to comply with FOFA, given a series of legislative delays that have resulted in an approaching deadline but no final legislation.
“What this means is this legislation can be tested,” Vamos said.
“It’s only when you test legislation under various scenarios that you find out what the outcomes will be.”
ASIC also said it planned to release final guidance on scaled advice before 1 July 2012, assuming FOFA had passed through Parliament by then.
“This guidance will take into account the best interests duty and will discuss a range of topics, including how the fact-find can be either limited or expanded, depending on the complexity of the advice being provided,” it said.
Vamos said ASIC’s guidance would allow the industry greater certainty when it came to developing a framework for scaled advice, avoiding the prospect of building the same systems twice and other costly exercises.
