The corporate regulator has announced an extension for Victorian advisers unable to fulfil Financial Disclosure Statement and renewal obligations due to lockdown restrictions in the state.
ASIC said it will take a ‘no action’ position on any delinquent FDS renewals due between 2 August and 26 October, provided the FDS is given to the client by December 7.
The no action position applies solely to licensees or authorised representatives where at least a substantial part of the business resides in Victoria. The relief relates specifically to sections 962G, 962K and 962S of the Corporations Act, meaning only pre-FoFA clients are involved.
Melbourne has been under heavy lockdown for several weeks in an attempt by premier Dan Andrews to stem the tide of Covid-19 cases that threatened to spiral in Victoria. For advisers, especially those with legacy communications systems or those with clients that don’t use internet services, maintaining compliance obligations has been problematic.
ASIC was careful to note that the no action position does no prevent an ongoing fee arrangement from being terminated for post-FoFA clients where an FDS is not given to clients or a renewal isn’t signed.
“Where an OFA terminates, the AFS licensee or representative must stop charging fees to the client (s962P of the Corporations Act) and inform the client in writing that the arrangement has terminated,” ASIC warned. “The licensee or representative must then enter into a new OFA with the client.”
The regulator also noted that the no action position does not affect the rights of third parties to take legal action for any contravention.
“ASIC will continue to monitor the appropriateness of the no-action position, having regard to the ongoing impact of COVID-19 and the Victorian Government’s announcements in relation to restrictions in Victoria,” ASIC stated. “This no-action position may be withdrawn at any time.”
The Association of Financial Advisers, who were vocal in pushing for relief in Victoria, applauded the move.
“ASIC have done everything that they can within the limits of the law to find a solution for Victorian based financial advisers impacted by FDS/opt-In non-compliance due to the COVID-19 lockdown,” the association stated. “Broader relief measures are in the hands of the Government and we have communicated with them to explain the difficulties confronting financial advisers and to suggest potential solutions.”
ASIC today also extended the suite of advice reforms it announced earlier in the year, inclduing early access to superannuation advice (for no more than $300) and the allowance for intra-fund advisers to providing advice on early release using ROAs instead of SOAs. These have been extended from the original cut-off date of 15 October this year to 15 April 2021.
