ASIC issues warning and reprimands information sheet

The requirement for ASIC to give warnings and reprimands to financial advisers in specified circumstances was introduced by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act).

And on Thursday, the corporate regulator released an information sheet explaining what warning and reprimands are; when it will give a warning or reprimand; how it will communicate the giving of a warning or reprimand; when and to whom it will provide procedural fairness before issuing a warning or reprimand; and the adviser’s right of review of ASIC’s decision.

Within the information sheet, ASIC explained that generally, a warning will warn a financial adviser against continuing the conduct or circumstances that led to ASIC giving the warning, whereas a reprimand will admonish the financial adviser in relation to the conduct or circumstances that have already ceased.

The corporate regulator assured that “not every concern brought to ASIC’s attention which indicates that one of the warning or reprimand circumstances may exist will lead to ASIC giving a warning or reprimand”.

“We will still conduct our usual triage, investigatory work and referral process,” it confirmed.  

Circumstances where ASIC must give a warning or reprimand include contravention of financial services law that it does not believe to be serious; refusal or failure to implement an AFCA determination; officer of corporations that are unable to pay their debts; and non-compliance with a Tax Practitioners Board (TPB) order.

The corporate regulator also advised that a warning or reprimand will be in the form of a letter sent to a financial adviser electronically, and will contain a statement of reasons for ASIC’s decision.

Moreover, it noted that warnings and reprimands will not be recorded on the Financial Advisers Register and that it will generally not publish the names of the financial advisers who we warn or reprimand.

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