ASIC offers opinions …

The Australian Securities and Investments Commission (ASIC) has published new regula­tory guidelines clarifying its policies on the content and independence of expert reports. The two guidelines, released at the end of Octo­ber, address concerns about the length of expert reports and the independence of their authors.

Issues covered in the guidelines include how experts should deal with any conflicts of interest in relation to those who commission the report and “when and how an expert should use a specialist” when preparing a report.

The guidelines are aimed primarily at expert reports used for corporate transactions such as takeover bids. However, ASIC said that the regulatory guidance could also clarify how expert reports should be used in product disclo­sure statements.

… and expands core competencies

The financial services regulator has also finally released the fruits of its long-running project to rid the industry of bottom-of-the-barrel opera­tors.

ASIC’s handbook, ‘Reference checking in the financial services industry’ was produced after consultation with other industry parties and Standards Australia in the so-called ‘Bad apples’ project.

The handbook is intended to help employers screen out dodgy financial advisers and is based on more general reference-checking procedures for employers which Standards Australia pub­lished at the same time.

Tony D’Aloisio, ASIC chair, said one “irrespon­sible adviser” can instantly damage a reputable financial planning firm.

“ASIC is encouraging all employers to share this type of information so that dubious or dishonest conduct does not go undetected and so that we maintain consumer confidence in the financial services industry,” D’Aloisio said.

ASIC has also upgraded its website to include searches on information before the introduc­tion of Financial Services Reform and provided links on reference-checking and to professional industry body sites.

Capping Claims

The federal government has approved three state-based professional standards schemes for Australia’s two major accounting bodies, leading the way for a cap on liability claims against ac­countants.

Peter Dutton, Revenue Minister and Assis­tant Treasurer, said the professional standards schemes of CPA Australia (NSW) and the Institute of Chartered Accountants (WA and NSW) have been recognised under Common­wealth legislation.

Members of the professional schemes agree to introduce formal risk management prac­tices such as ongoing education, transparent complaint procedures and a level of profes­sional indemnity insurance. In return, scheme members will have their professional liability capped under state and federal legislation (once approved by the Commonwealth government).

“The overarching aim of professional standards schemes and liability caps is to maintain afford­able levels of professional indemnity insurance, as well as improve professional standards and consumer protection,” Dutton said.

CPA Australia said it should have schemes approved in all states shortly. The accountancy body also said the liability cap would apply to fi­nancial planning members who were authorised representatives but not to Financial Service Licensees. 

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