ASIC confirms ‘independence’ definitions

ASIC confirms ‘independence’ definitions

The corporate regulator has affirmed its position on changes to section 923A of the Corporations Act, which will restrict the terms financial advisers can use to describe their businesses.


In a statement released today, ASIC confirmed it would be updating its regulatory guidance to restrict the use of terms implying independence to only those advisers meeting the regulator’s new definition of ‘independent’.

The changes to the regulatory guidance will mean advisers who don’t meet ASIC’s ‘independence’ definition will not be able to call themselves ‘independently owned’, ‘non-aligned’ or ‘non-institutionally owned’.

“We want to ensure that those providing financial services to consumers are accurately describing their services,” said ASIC deputy chair Peter Kell.

“Consumers should not be misled into thinking a person is free from conflicts of interest solely because they use terms such as ‘independently owned’.”

ASIC announced its intention to restrict the use of such terms in June this year, and granted advisers currently using the term a six-month ‘facilitative compliance period’ to prepare for the change, which will come into effect from 31 December 2017.

 

ASIC confirms ‘independence’ definitions
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