Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
ASIC announces the launch of the reportable situations regime
ASIC has announced that it will improve the operation of the reportable situations regime, which was first introduced on 1 October 2021 and is formerly known under the umbrella term of “breach reporting”.
Breach reporting is integral for board oversight and risk management by licensees and ASIC’s system-wide regulatory oversight. ASIC says the new regime will require Australian Financial Services Licensees (AFSL) and Credit Licensees to notify of “reportable situations” within 30 calendar days no longer 10 days.
According to the ASIC announcement, the types of reportable situations that must be reported include:
- Significant breaches or likely significant breaches of ‘core obligations’
- Investigations into whether there is a significant breach or likely breach of a ‘core obligation’ if the investigation continues for more than 30 days
- The outcome of such an investigation if it discloses there is no significant breach or likely breach of a core obligation
- Conduct that constitutes gross negligence or serious fraud
- Conduct of financial advisers and mortgage brokers who are representatives of other licensees in certain prescribed circumstances
The new regime has been launched owing to long-held concerns on the quality and timeliness of previous breach reporting, which took over four years on average to identify.
“The new obligations will help firms identify and act swiftly on the breaches that matter, making sure they get the attention they deserve. Licensees and boards will have greater confidence they are doing the right thing by consumers, and ultimately their firm and shareholders,” ASIC states.
The regime will provide ASIC with vital data to identify emerging trends of non-compliance in the industry as well as early detection of non-compliant behaviours, facilitating prompt regulatory action where appropriate.
ASIC Commissioner Sean Hughes said: “We are aware that the regime has led to several implementation challenges. However, ASIC remains committed to the successful implementation of this regime and we have developed a comprehensive plan of work to ensure that it meets its objectives for ASIC, industry and consumers.”
ASIC will continue to engage with the industry on reporting practices adopted by licensees to further understand any issues that are placing an unnecessary compliance burden on the industry.
