ASIC has issued an information sheet for accountants who provide services in relation to self-managed superannuation funds (SMSFs).
Information Sheet 216 AFS licensing requirements for accountants who provide SMSF services (INFO 216) covers how the Australian Financial Services (AFS) licensing regime applies to SMSF services provided by accountants. It sets out the various SMSF services an accountant might provide and whether a licensing exemption applies to them or whether an accountant must be covered by an AFS licence for those services.
'ASICs primary role in relation to SMSFs is to regulate the gatekeepers – the accountants, financial advisers and SMSF auditors,' said Deputy Chairman, Peter Kell.
'We think that accountants and financial advisers have a critically important role to ensure that only those investors for whom an SMSF is suitable go into the SMSF sector and, in doing so are fully informed.'
The exemption which allowed recognised accountants to give financial advice about acquiring or disposing of an interest in an SMSF was repealed on 1 July 2016 and accountants need to be clear about which services must be covered by a licence and which remain exempt. INFO 216 will assist accountants in understanding which services do and not require them to be covered by an AFS licence.
ASIC has also modified Corporations Regulation 7.1.29(4)(c)(ii) to ensure that accountants can continue to provide taxation advice on financial products not covered by their licence in ASIC Corporations (Recognised Accountants: Exempt Services) Instrument 2016/1151.
The Instrument modifies reg 7.1.29(4)(c)(ii) so that a limited AFS licensee can rely on the exemption to provide tax advice to a retail client on a financial product which is not covered by an authorisation in their licence.
Background
From 1 July 2016, all accountants must be covered by an AFS licence to give advice about acquiring or disposing of an interest in a SMSF to their clients.
To facilitate moving into the AFS licensing regime, since 1 July 2013 accountants have been able to apply for an AFS licence to provide a limited range of financial services relevant to SMSFs. We refer to this licence as a 'limited' licence: see regs 7.6.01BA, 7.6.04, 7.8.12A and 7.8.14B.
A limited licence authorises the licensee to provide a limited range of financial services relevant to SMSFs – for example, advice about SMSFs, a client's existing superannuation holdings (in certain circumstances) and 'class of product advice' – depending on the authorisations that are selected in the application and granted by ASIC.
'Class of product advice' means financial product advice about a class of products that does not include a recommendation about a specific product.
A limited AFS licensee can be authorised to provide 'class of product advice' about the following financial products:
- superannuation
- securities
- simple managed investment schemes
- general insurance products
- life risk insurance products
- bank deposit products