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ASIC further clarifies record-keeping obligations for advice

ASIC has made an amendment to the obligations for Australian financial services licensees when giving personal advice which will also have implications for accounting firms holding limited licenses.

ASIC further clarifies record-keeping obligations for advice
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  • mbrownlee
  • October 27, 2016
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The corporate regulator announced that it has made an amendment to Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice.

The amendments to record-keeping obligations include that AFS licensees must have access to records for the period of time in which the records are required to be kept, even if a person other than the licensee holds the records.

The amendments also make it explicit that authorised representatives who are advisers must keep records and give the records to their authorising licensee if the licensee requests the records for the purposes of complying with financial services laws.

ASIC deputy chairman Peter Kell said advice licensees have ultimate responsibility for the advice given by their representatives and need to be able to monitor and supervise their representatives.

“Consumers should have trust and confidence that advice licensees have access to their representatives’ records so they can monitor the advice given by their representatives and remediate consumers if something goes wrong,” said Mr Kell.

Although the amendments to the advice licensees' obligations clarify, rather than amend, those obligations, ASIC said that some advice licensees may nevertheless need to make changes to their systems as a result of the class order.

“Therefore, ASIC will take a facilitative compliance approach for the first six months in relation to the obligation on advice licensees to ensure that they have access to records.”

ASIC said where licensees make a good-faith attempt to comply with the obligation but are unable to do so because of, for example, the need to make systems changes, they will take a facilitative approach.

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