Home / In Practice / ASIC updates guidance for ‘warnings and reprimands’

ASIC updates guidance for ‘warnings and reprimands’

Timing, reasons and implications for financial advisers
In Practice

ASIC has just released an information sheet allowing it to issue warnings and reprimands to financial advisers that do the wrong thing. If you’re a financial adviser, you’ll definitely want to take note of the key messages from the document.  

As part of the Hayne Royal Commission Response – Better Advice Act 2021, a requirement was for ASIC to issue warnings and reprimands to financial advisers in “specified circumstances.” In other words, when a financial adviser has breached financial services laws. ASIC has today released Information Sheet 270 Warnings and Reprimands (INFO 270) which explains what warnings and reprimands are, and what they involve. INFO 270 explains:

  • warnings and reprimands are
  • when ASIC will give a warning or reprimand
  • how ASIC will communicate the giving of a warning or reprimand
  • when and to whom ASIC will provide procedural fairness before giving a warning or reprimand, and
  • the adviser’s right of review of ASIC’s decision to give a warning or reprimand.

Just to summarise, a warning or reprimand is a letter sent by ASIC to an adviser warning against continuing the conduct or circumstances that led to the warning, and a reprimand will admonish the financial adviser in relation to the conduct or circumstances that have already ceased. ASIC provides a statement of reasons to the adviser in both instances.

  • When will ASIC issue a warning or reprimand?

    Not every concern leads to a warning or reprimand, but it should be noted that ASIC conducts its own investigation and referral process. At the end of it, if the outcome is that the regulator believes that a warning or reprimand circumstance exists, then a financial adviser can expect ASIC to:

    • exercise its other powers under the Corporations legislation (e.g. to impose a banning order or accept an enforceable undertaking)
    • convene a sitting panel of the Financial Services and Credit Panel (FSCP), or
    • give the financial adviser a warning or reprimand.

    Here is a table that contains possible warning or reprimand circumstances a financial adviser can contravene:

    Print Article

    A great way to play the booming natural gas market

    Longreach taps into the LNG market supported by projects in Texas & Oklahoma.

    Ishan Dan | 11th Aug 2022 | More
    ASIC levy review targets adviser ‘time-lag’ issue

    The review will consider “the consequences of time lags between regulatory action and cost allocation”, the terms of reference states.

    Tahn Sharpe | 11th Aug 2022 | More
    AMP Advice to ‘break even’ by 2024 as losses soften

    The institutional provider’s AUM and profit lines stayed red in 1H22, but positive signs emerged.

    Tahn Sharpe | 11th Aug 2022 | More
    Advisers urged to tread carefully with ‘wholesale investor’ status
    Staff Writer | 28th Jul 2022 | More
    Top hedge fund award goes to L1 Capital
    Greg Bright | 13th Dec 2021 | More
    MAX Award winners and the new world outside
    Greg Bright | 13th Jun 2022 | More
    INDepth with Andrew Lockhart from Metrics Credit Partners
    The Inside Adviser | 30th Jun 2022 | More
    Quality of advice review focused on advisers, not consumers
    Drew Meredith | 11th Jul 2022 | More