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17-399MR ASIC delivers on commitment to help limited AFS licensees understand their obligations
The Australian Securities and Investments Commission (ASIC) has today released new webpage guidance and information sheets to help limited Australian Financial Services (AFS) licensees and their representatives understand their key obligations.
The new guidance covers the main issues that limited AFS licensees requested additional guidance on. This guidance follows an ASIC visit to limited AFS licensees during 2016–2017 (as explained in 17-239MR ASIC checks on limited AFS licence experience).
The material released today explains:
- who is a limited AFS licensee and a representative of a limited AFS licensee — Webpage Limited AFS licensees;
- the activities that limited AFS licensees can undertake — Information Sheet 227 What can limited AFS licensees do? (INFO 227);
- the conduct and disclosure obligations that apply to limited AFS licensees when they give advice — Information Sheet 228 Limited AFS licensees: Advice conduct and disclosure obligations when providing advice under a limited AFS licence (INFO 228); and
- what limited AFS licensees need to do on an ongoing basis — Information Sheet 229 Limited AFS licensees: Complying with your licensing obligations (INFO 229).
This material has been tailored specifically for limited AFS licensees, drawing the most relevant information from existing ASIC guidance.
To further support limited AFS licensees, ASIC has also produced a quick guide summarising the key obligations that apply when they give advice. The purpose of this guide is to provide quick glance reminders for new licence holders. ASIC encourages limited AFS licensees and their representatives to download, keep and refer to this resource as they build up their businesses in giving financial advice.
- Information Sheet 227 What can limited AFS licensees do? (INFO 227)
- Information Sheet 228 Limited AFS licensees: Advice conduct and disclosure obligations when providing advice under a limited AFS licence (INFO 228)
- Information Sheet 229 Limited AFS licensees: Complying with your licensing obligations (INFO 229)
- Quick guide: Key obligations when giving advice under a limited AFS licence
As part of the Future of Financial Advice reforms, the exemption under regulation 7.1.29A of the Corporations Regulations 2001 (Corporations Regulations) that allowed recognised accountants to give advice about SMSFs without holding an AFS licence was repealed on 1 July 2016. This meant that from 1 July 2016 accountants who wished to continue giving advice to their clients about SMSFs needed to obtain an AFS licence.
This followed the three-year transition period that commenced on 1 July 2013.
To facilitate moving into the AFS licensing regime, accountants could apply for an AFS licence to provide a limited range of financial services relevant to SMSFs. We refer to this form of licence as a 'limited' AFS licence: see regulations 7.8.12A and 7.8.14B of the Corporations Regulations.
As at 30 June 2017 ASIC had granted 787 limited AFS licenses.
ASIC visited twenty limited Australian Financial Services (AFS) licensees during 2016–2017 to assess how they were operating under their new licences and to discuss and promote compliance with their AFS licensee obligations. In light of the findings from these visits, and the other queries that ASIC has been receiving, ASIC committed to providing additional education resources for limited AFS licensees.
ASIC consulted with two of the accounting industry’s key professional bodies — CPA Australia and Chartered Accountants Australia and New Zealand — in developing this guidance.