News and articles relating to the Australian Securities and Investments Commission (ASIC).

No Commonwealth Bank financial advice Royal Commission

Commonwealth bank financial advice royal commission, Government response ASICThe Government has said there will not be a Royal Commission into financial advice by the Commonwealth Bank, in a response to a Senate Committee report.

A “judicial inquiry or Royal Commission” into financial advice at the Commonwealth Bank was a recommendation of the Senate Economics Committee inquiry into the performance of the Australian Securities and Investments Commission (ASIC).

“There have already been several comprehensive inquiries into these events and related matters,” said Senator Cormann, the Acting Assistant Treasurer.

Read More »No Commonwealth Bank financial advice Royal Commission

ASIC sets out key challenges for 2014/15 in Strategic Outlook

ASIC challenges 2014/15 Strategic OutlookASIC has released its Strategic Outlook for 2014/15, which “sets out the key risks ASIC sees to the markets it regulates, and how ASIC will respond.”

According to the document one of ASIC key challengers in 2014/15 is the “structural change in our financial system through growth of market-based financing, which is largely driven by growth in superannuation”

ASIC is concerned about losses stemming from “weak compliance systems, poor cultures, unsustainable business models and conflicted distribution.”

Read More »ASIC sets out key challenges for 2014/15 in Strategic Outlook

37% of life insurance advice doesn’t comply with the law: ASIC

ASIC research life insurance doesn't comply lawResearch by ASIC into financial advice for life insurance has shown a worrying level of non-compliance with the law, and conflicts of interest for advisers to the detriment of clients and insurance companies.

Quality of life insurance advice

ASIC’s survey of life insurance advice found that 37% of clients had received advice which “failed to comply with the law”.

Upfront commission appears to be a particular issue in the qualify of advice. “Where an adviser is paid under an upfront commission model it has a statistically significant bearing on the likelihood of that adviser giving advice that did not comply with the law,” said ASIC. 45% of upfront commission advice failed ASIC’s tests, whereas only 7% of non-upfront commission advice failed.

Read More »37% of life insurance advice doesn’t comply with the law: ASIC

Guidance needed on wholesale investor test for SMSFs, says SPAA

Further guidance SMSF retail/wholesale investor test, SPAASPAA has welcomed the statement by ASIC regarding the “treatment of an SMSF as a wholesale or retail investor”.

“It would appear that the announcement by ASIC on 8 August is to clarify the fact that the threshold to determine whether the trustee of an SMSF is a wholesale or retail investor has been reduced from $10m to $2.5m”, says SPAA.

While welcoming the announcement by ASIC, SPAA “believes that further guidance is required to be issued by ASIC on what constitutes a wholesale investor”.

“While the legislation may prescribe various amounts there are no regulations to indicate how those amounts are to be calculated”, says SPAA.

Read More »Guidance needed on wholesale investor test for SMSFs, says SPAA

Government sets out expectations for ATO, ASIC, APRA

Government expectation ATO, ASIC, APRAThe Government has issued a ‘statement of expectations’ to many of the regulatory bodies, including the ATO, ASIC and APRA. These statements outline “the Government’s expectations about the role and responsibilities” of the regulatory bodies.

While acknowledging that the regulatory bodies need to act “independently and objectively”, the Government expects that they will “take into account the Government’s broad policy framework, including its deregulation agenda”.

This includes the expectation the bodies will “look for opportunities to reduce compliance costs for business and the community” to contribute to the Government’s $1 billion “red and green tape reduction target”. They are also expected to make a “major contribution to the deregulation agenda and help to boost productivity”.

Read More »Government sets out expectations for ATO, ASIC, APRA

Property schemes’ disclosure to investors ‘disappointing’: ASIC

ASIC review disclosure listed & unlisted property schemes - disappointingASIC has described the results of a review of disclosure by unlisted property schemes to investors, including SMSFs, as “disappointing”.

Mr Tanzer, the ASIC Commissioner, said the results were “disappointing especially when, at a time in the rise of self-managed superannuation funds, many Australians are looking to invest in real estate”. Mr Tanzer also warned that such property schemes “do carry risks as well as opportunities” and that the lack of disclosure is putting investors in a “vulnerable position”.

Read More »Property schemes’ disclosure to investors ‘disappointing’: ASIC

Only 62 applications for accountants limited AFSL says ASIC

ASIC accountant limited AFSLs, SMSF auditor, compliance actionASIC has received only 62 applications from accountants for limited AFSLs up to the end of May, 7,500 people have been registered as SMSF auditors and ASIC is concerned by advertising of SMSFs and property promotion.

These are some of the things to take from the speech, The Regulator’s Perspective on the Regulation of SMSFs, that the Commissioner of ASIC, Greg Tanzer, recently gave to the CPA Australia SMSF Conference 2014. Addressing the accounting body Tanzer said:

“We think that accountants and other gatekeepers have a critically important role to ensure that:

  • at an individual level, only those investors for whom an SMSF is suitable go into the SMSF sector and, in doing so, they are fully informed, and
  • at an aggregate level, the overall health of the SMSF sector is sound ”

Accountants Limited AFSL

Tanzer revealed a number of interesting statistics which show the lack of take-up of limited AFSLs by accountants, between 1 July 2013 and 27 May 2014:

  • ASIC has received only 62 applications for limited AFSLs
  • Only 27 limited AFSLs have been approved
  • One application is likely to be refused
  • 25 applications have been withdrawn or returned as they are “materially deficient in respect of the documentation and information which had been submitted in support of the application

Read More »Only 62 applications for accountants limited AFSL says ASIC