ASIC called out on ‘unnecessary and unworkable’ DDO requirement

While the FPA praised the removal of the requirement for financial advisers to report “nil complaints” to product issuers, it called on ASIC to make further adjustments on Thursday.

“…the FPA calls on ASIC to remove formal reporting periods which create unnecessary and unworkable record-keeping and reporting requirements for financial planners and instead move to an ‘as required’ reporting requirement,” FPA’s head of policy, strategy and innovation, Ben Marshan, said.

“There is an opportunity for ASIC to create an alignment between dispute resolution and TMD reporting to remove further layers of unnecessary regulatory burden, duplication and costs on our members and the profession.”

Last month, the Treasury announced a number of amendments to the DDO framework in response to industry feedback, which included a clarification of the product types exempted from the obligations — margin loans to corporates, foreign cash that is settled immediately, and non-cash payment facilities such as credit and debit card facilities.

The amendments also made clear that employees of licensees are not subject to their own separate set of DDO obligations, and that 31-day term deposits are included in the regime.

“The FPA also remains concerned with the lack of clarity or definition from product manufacturers in relation to significant dealing reporting,” Mr Marshan said.

“The FPA encourages ASIC to take action against products who have failed to clearly define what a significant dealing is in relation to their specific product.”

The FPA has confirmed it will issue a submission in response to the government’s consultation paper ahead of the DDO obligations being introduced on 5 October.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.