ASIC has updated its reference checking and information sharing protocol for financial advisers and mortgage brokers to reflect legislative changes. The updated reference checking and information sharing protocol for financial advisers and mortgage brokers will commence on 20 August 2024.
The updated protocol will enable mortgage broking intermediaries (i.e. aggregators) to obtain references on mortgage broker licensees and licensees’ representatives.
The ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 (2024 Protocol) will replace the ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429 (2021 Protocol).
The 2024 Protocol will introduce provisions enabling all licensees to request references about a prospective representative from the representative’s current and/or former mortgage aggregator. The 2024 Protocol does not impose obligations on licensees to request these additional references. It is at their discretion whether to obtain such references. ASIC encourages licensees to request references where appropriate.
The 2024 Protocol will introduce other amendments, including a question on the template consent and reference forms about any warnings or reprimands to financial advisers from ASIC and the Financial Services and Credit Panel.
There is a transitional period until 28 February 2025 during which time licensees can request references using template consent and reference forms from the 2021 Protocol or the 2024 Protocol.
To help licensees comply with reference checking requirements under the 2024 Protocol, ASIC has updated Information Sheet 257 ASIC reference checking and information sharing protocol (INFO 257).
Download
- ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 and Explanatory Statement.
- Information Sheet 257 ASIC reference checking and information sharing protocol (INFO 257)
- Example references for a financial adviser and mortgage broker
Background
The 2021 Protocol came into effect from 1 October 2021. It was introduced to give effect to a recommendation from the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry, and subsequent law reform, to improve information sharing and reference checking in the financial advice and mortgage broking industries.
When the 2021 Protocol commenced, legislation did not provide for the Protocol to enable aggregators to obtain references on mortgage broker licensees’ and those licensee’s representatives.
The Corporations Act 2001 and National Consumer Credit Protection Act 2009 were subsequently amended in 2023 so ASIC could implement a protocol enabling aggregators to seek references in such circumstances.
Following legislative amendments, ASIC consulted with industry about updating the protocol to extend its operation to aggregators.
ASIC is Australia’s corporate, markets and financial services regulator.