The Chairman of the Australian Securities and Investments Commission (ASIC), Mr Jeffrey Lucy today announced relief from the law that will assist certain remote Indigenous communities when opening bank accounts.
The ASIC class order relieves certain people in communities in the Northern Territory and Queensland from the need to hold an Australian financial service licence (AFSL), where they arrange for the issue of, and/or provide financial product advice in relation to, certain basic deposit products issued by Westpac Banking Corporation (Westpac).
The relief, provided under ASIC Class Order [CO 05/844]: Licensing and disclosure relief for certain community representatives in remote communities, applies to Chief Executive Officers of the local councils (and their delegates) in the remote Northern Territory and Queensland communities.
‘ASIC congratulates Westpac for the initiative it has shown in seeking relief from ASIC, which will enable it to better meet the needs of its Indigenous customers’, Mr Lucy said.
‘Many Indigenous consumers in remote communities prefer face to face assistance from a familiar person when opening a bank account. Local council staff are often the first point of call as the nearest bank branch may be some distance from the community’,
‘This move by ASIC is an example of the practical solutions that have been developed between banks and remote Indigenous communities. It is also a clear acknowledgement of the difficulties that remote communities face, and the need to ensure that suitable persons are providing banking services to residents in those communities’, Mr Lucy added.
Background
There are approximately 1,200 discrete Indigenous communities in Australia, with most located in the Northern Territory and Queensland. Most are classified as remote or very remote. Residents in 52 per cent of these communities have to travel more than one hour by road to access banking services (for 13 per cent it takes more than five hours). For 10 per cent, the usual means of transport for community members to access banking services is by boat or aircraft. (Statistics taken from Australian Bureau of Statistics, Housing & Infrastructure in ATSI Communities, 2001, www.abs.gov.au.)
Some local councils in remote Indigenous communities in the Northern Territory and Queensland have adopted the role of providing assistance and advice to residents within their communities when they open basic bank accounts. This occurs where it is difficult to access a bank branch. Westpac has, in the past, assisted local councils in the Northern Territory and Queensland to provide this service.
Since the Financial Services Reform Act 2001 was introduced the services provided by a council may amount to arranging for the issue of basic deposit products by a financial institution and/or providing financial product advice in relation to basic deposit products issued by a financial institution.
The Corporations Act 2001 (the Act) requires that a person who carries on a financial services business in this jurisdiction must hold an AFSL covering the provision of those financial services, or provide the service as a representative of a second person who is allowed to provide those financial services.
The Act requires that where a financial services licensee, or authorised representative, provides a financial service to a retail client, the providing entity must give a Financial Services Guide to that person.
Under the relief announced today, Chief Executive Officers (CEOs) of certain councils will not be required to obtain an AFSL or become an authorised representative of Westpac in order to provide financial services in relation to basic deposit products issued by Westpac. In addition, CEOs will not be required to give a Financial Services Guide to each retail client, to whom they provide those services.
The Local Government Act (NT) and Local Government Act 1993 (QLD) both require CEOs of local government councils to possess certain minimum qualifications, skills or experience.
End of release