ASIC's new breach reporting regime resulting in 'unnecessary compliance burden'

The Financial Planning Association of Australia (FPA) has welcomed the news that ASIC will focus on improving the operation of the reportable situations regime — previously referred to as breach reporting — originally brought in on 1 October 2021.

Earlier this month, the corporate regulator acknowledged concerns with the regime — which requires Australian financial services (AFS) licensees and credit licensees to submit notifications about "reportable situations" to ASIC within 30 calendar days — with commissioner Sean Hughes conceding it has led to "a number of implementation challenges".

ASIC also said it will engage with Treasury on how the regime meets policy objectives.

FPA CEO Sarah Abood said ASIC's announcement that it will work with stakeholders on solution is an "important step forward" for the sector.

"Some of the reporting required is placing an unnecessary compliance burden on FPA members. The FPA and its members would welcome further practical guidance from ASIC to assist licensees in meeting their obligations," Ms Abood said.

"We look forward to working with ASIC to help facilitate the successful implementation of this regime to ensure that it meets its objectives for ASIC, the industry, financial planners and consumers."

Ms Abood's comments come after the FPA welcomed news by financial services minister Stephen Jones that a consultation paper will be developed on education standards and the adviser exam.

On Wednesday (10 August), Mr Jones said that the government would look at options to "streamline the education requirements for financial advisers" and addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.

Ms Abood — who previously stated that addressing the education standards should be the “first order of business” for Mr Jones — said the association is looking forward to participating in the consultation "to ensure the continuing professionalisation of financial advice".

"Financial planners currently face considerable uncertainty regarding future professional standards, and many have paused or postponed studies until the outcome is known. Hence, we believe the resolution of this matter is of the highest priority," Ms Abood said following Mr Jones' announcement.

"We encourage the government to ensure the consultation process is targeted and efficient, and we are keen to see swift and decisive action by the Minister giving the profession certainty on these standards."

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.