The Australian Securities and Investments Commission (ASIC) today reminded Australian financial services (AFS) licensees that they must notify ASIC of any significant breaches of their obligations under the financial services laws, even where these are the subject of the Government’s FSR refinements proposals.

‘We understand there has been confusion in some sectors of the industry about our compliance approach during the implementation of the FSR refinements. With the introduction of super choice today, we are keen to clarify our position’, ASIC Executive Director of Compliance, Ms Jennifer O’Donnell, said.

ASIC outlined its compliance position on the FSR refinements in Information Release [IR 05-28], ASIC compliance guidance on the FSR refinements proposals and fees template requirements.

‘As previously stated, we will generally not take action for breaches of financial services provisions that are the subject of a refinement proposal where that conduct is more likely than not to be lawful if the refinement proposal became law’, Ms O’Donnell said.

‘However, we still expect that while the FSR proposals are under consideration, any significant breaches of the existing law will be reported to us under the breach reporting provisions of the Corporations Act’, she said.

As an example, if a licensee decided not to give a Statement of Advice because they believed they would be exempt under proposal 2.1 (ongoing relationship and no significant change), they would still have to give ASIC a breach notification.

The Government’s Refinements to Financial Services Regulation proposals paper is available from the Treasury website at www.treasury.gov.au.