ASIC has formally paused the Code of Ethics monitoring body plan, announcing a three-year exemption to licensees’ obligation to ensure advisers are covered by a compliance scheme.

A notice published on the Australian Securities and Investments Commission’s website said the ruling applies to all Australian financial services licensees.

“ASIC has taken action to provide certainty to Australian financial services licensees that they will not be in breach of the law because their financial advisers were not able to register with an ASIC-approved compliance scheme by 1 January 2020, as originally required,” the notice stated.

While ASIC was expected to announce some form of hiatus to the compliance scheme given that there will be no monitoring body in place on January 1, the three-year lee-way period raises questions about the timing of the compliance scheme arrangement.

In its October announcement the government said it will “work towards establishing the new body in early 2021” – roughly between 14 and 20 months from today.

The extended 36-month exemption, however, indicates that ASIC is either anticipating a delay in the new body’s formation or that there will be some sort of transition period for advisers to sign up before the end of 2022.

The action comes after the Morrison government announced in October that it was “accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers”, as recommended in the Hayne royal commission final report.

The announcement, which effectively rescinded the invitation of interested parties to apply for the role of a code monitoring body, was a blow to the Financial Planning Association and five other representative groups who had applied for the job under the name of Code Monitoring Australia.

FPA chief executive Dante De Gori expressed his frustration to Professional Planner shortly after the October announcement.

“We’re disappointed because of the amount of work, time and effort that’s been put into it,” De Gori said. “We satisfied all the requirements and for this decision to be made at this point in time… it’s just disappointing.”

The government stated in October that licensees will take on the role of monitoring advisers’ adherence to the Code of Ethics in the interim, but issued a warning that ASIC “will be able to take action against licensees that fail to do so”.

Further detail from ASIC on their expectations of licencees in their temporary code monitoring role is expected.



Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at
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