Addressing the Stockbrokers Association of Australia annual conference, Australian Securities and Investments Commission (ASIC) chairman Greg Medcraft reiterated plans for a “facilitative compliance approach” to the reforms.
“This recognises that FOFA requires businesses to undertake major work so that IT systems and compliance requirements are in place for the new regime,” he said.
Mr Medcraft said careful attention needs to be paid to the best interests requirement – including by stockbroking advisers – a measure he described as a “positive obligation”.
Referring to the broking sector specifically, Mr Medcraft said the government had heeded industry concerns relating to capital raising and would allow carve-outs for brokerage as well as stamping fees on initial public offerings and fundraising.
ASIC will also relax the ban on asset-based fees on borrowed amounts so that brokerage can be charged where trading is linked to margin loans, Mr Medcraft said.
However, he cautioned that all stockbroking-related exemptions are subject to review due to the broad scope of the exemptions that will be provided in relation to stockbroking activities.
“As it may take time to identify if there are unintended outcomes of these exemptions, the review will be undertaken by 2015,” he said.
“The review will look at any unwelcome changes to the business models of securities dealers that were undertaken with the purpose of falling within the carve-outs. Stockbrokers will still have duties around conflicted remuneration, and the provision of broader financial advice.”
