Further financial adviser registration requirement delay on the cards

A central registration requirement for financial advisers was originally introduced in The Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021 and was due to come into force from 1 January 2023.

However, in November 2022, the government delayed the financial adviser registration requirement until 1 July 2023.

Registration was proposed to occur in two stages, beginning with a one‑off registration process administered by the Australian Securities and Investments Commission (ASIC) using the Financial Advisers Register (FAR).

The second stage was then set to commence once the FAR transitions to the Australian Tax Office as part of the Australian Business Registry Service.

“ASIC has been engaging closely with industry about how best to implement stage one, with a view to ensuring the obligation on licensees to register financial advisers operates as efficiently as possible,” Financial Services Minister Stephen Jones said in a statement at the time.

“Through this engagement, ASIC has identified ways to improve the operation of the stage one registration process with benefits for licensees.”

In May, the registration requirement was delayed again, with ASIC extending the deadline until 1 October 2023.

The corporate regulator said that this delay would allow for several things to occur beforehand, including for Parliament to consider the improvements proposed by the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 and for ASIC to issue subsequent regulatory guidance and conduct webinars.

Now, with less than three weeks until the deadline, the bill has still not progressed through Parliament, with the Financial Services Council (FSC) flagging that yet another delay could be implemented by ASIC.

“The extension to 1 July for financial advisers to self-register has been given effect under the Corporations Amendment (Registration of Relevant Providers) Regulations 2022. However, the Treasury Laws Amendment No.1 2023 Bill remains currently before the Senate with provisions that will enable dual registration and allow ASIC to administer this registration through automated tools,” the FSC said in its September policy update.

“‘Being registered’ is not current for the purposes of the Financial Adviser Register and once the register is open, advisers will be encouraged to register as soon as possible. It will be a strict liability offence where they are still practicing but not current on the Financial Adviser Register.

“The bill has not yet passed the Parliament and it is not certain when that is likely to occur. ASIC addressed this issue by using its powers as regulator to extend the registration date from July to October 2023. It is within its powers to do so again if it chooses.”

Speaking in Sydney earlier this year, Leah Sciacca, a senior executive leader for financial advisers at ASIC, hinted at uncertainty regarding the launch date of the new registration obligations.

“There are currently some amendments to the Better Advice Act before Parliament that relate to financial adviser registration, and this may impact the timing of ASIC launching its registration system,” Ms Sciacca said.

“In addition to ensuring our IT infrastructure is ready, we’ve prepared guidance for industry about the registration requirements, including how to register a relevant provider, what happens when a registration ceases, and the declarations that will be required to be made by licensees as part of the registration process.”

Ms Sciacca added at the time that ASIC would continue to monitor the amendments before Parliament and assist the industry in understanding its obligations in relation to registration.