Financial Services Update

In this edition

  • ASX Update: Continuous Disclosure and Corporate Governance Practices
  • New Standards for Financial Advisers… it’s happening
  • CompliSpace Responsible Manager Training Workshop: Sydney 16th December

ASX Update: Continuous Disclosure and Corporate Governance Practices

This blog highlights a number of small, but important, changes that the ASX recently made to a number of their Guidance Notes for listed entities. As these changes come into effect on 19 December 2016, we draw your attention to the key changes in the Guidance Notes.

In updated Guidance Note 8 on continuous disclosure, the ASX has added a requirement for proper authorisation when listed entities respond to ASX price queries letters or ‘aware letters’, hopefully a rare event. The ASX sees proper authorisation as being in accordance with the entity’s Continuous Disclosure Policy or otherwise by the Board. For more information on these changes, see Guidance Note 8 Changes.

In updated Guidance Note 9 on the disclosure of corporate governance practices, the ASX has expanded its guidance to:

  • highlight that disclosures about director skill matrices and sustainability need to address the detailed guidance provided in the relevant Corporate Governance Recommendations 2.2 and 7.4; and
  • clarify the role and requirements of the Appendix 4G – this is a relevant issue quite soon for entities about to prepare their Appendix 4G to accompany their 31 December year end accounts. For the majority of other listed entities with a 30 June year end, these issues will not arise again until the Appendix 4G is being prepared for lodgement with the 2017 annual accounts.

For more information on these changes, see Guidance Note 9 Changes.

In updated Guidance Note 23 on quarterly cash flow reports, the ASX has expanded their guidance to capture their current requirements for quarterly reports otherwise detailed in Appendix 4C and 5B. Also, the ASX highlights that they may exercise their discretion to require quarterly reports from certain entities, not generally required, or they may require more frequent cash flow reports, than quarterly, in other cases. For more information on these changes, see Guidance Note 23 Changes.

New Standards for Financial Advisers… it’s happening

Following on from the Financial Services Inquiry, the Federal Government recently introduced a much anticipated draft bill into Parliament to mandate professional, ethical and educational standards for financial advisers.

ASIC’s RG 146 is the current industry standard which outlines the minimum knowledge, skills and education for advisers. The adequacy of these standards have been questioned in recent years by Parliament, industry and consumers and for the most part found to be inadequate.

What are the key features?

The Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 (Cth) (Bill) introduces the following:

  • minimum requirements of education for all financial advisers, new and existing;
  • an industry-wide standard for examinations;
  • a new code of ethics;
  • mandated supervision for new advisers;
  • an ongoing requirement for professional development; and
  • an independent standards body to administer the regime, funded by the industry.

If the Bill passes, the new regime will commence on the 1st January 2019.

What does this mean in practice?

Initially, not too much. Especially for existing advisers who will have two years to pass the proposed industry exam and five years to meet the education requirements.

New advisers will need to have a relevant degree in order to enter the industry.

This means that, by the 1st January 2024, all financial advisers who are not exempt will need to be suitably qualified. Non-compliant advisers may be subject to disciplinary action and sanction.

Further, an independent standards body will be established immediately upon commencement of the Bill and will administer the regime including the development of the industry wide exam, code of ethics and standards. In addition, it is expected that professional associations and other monitoring bodies will progressively develop compliance schemes, with ASIC approval, to ensure advisers meet the standards under the new code of ethics.

CompliSpace Responsible Manager Training Workshop: Sydney 16th December

CompliSpace is running High Impact Training for Financial Services Executives On-The-Go in Sydney on Friday 16 December.

If you are an AFSL holder, you must ensure that your responsible managers and representatives receive ongoing training. Our interactive, “on-the-go” workshops are designed to keep you up-to-date with the latest industry changes, real-life case studies and exercises and fast-track the practical development of new knowledge and skills.

Training is delivered in an interactive workshop environment providing attendees with:

  • a simple framework for understanding your core AFSL obligations;
  • practical guidance on current regulatory issues and trends; and
  • CPD points for attendees.

To learn more and to register click here for the Sydney Workshop.

This blog is a guide to keep readers updated with the latest information. It is not intended as legal advice or as advice that should be relied on by readers. The information contained in this blog may have been updated since its posting, or it may not apply in all circumstances. Please contact us on (02) 9299 6105  with your query and we will be happy to assist.

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