On 26.4.18, Australian Securities and Investments Commission (ASIC) updated its guidance for accountants who provide services on self-managed superannuation funds (SMSFs) to cover the exemption from the Australian Financial Services (AFS) licensing requirements for Tax and BAS agents.
The guidance was developed in conjunction with the Tax Practitioners Board and is being released as part of updates to Information Sheet 216 AFS licensing requirements for accountants who provide SMSF services (INFO 216).
- It sets out some basic principles which tax and BAS agents can apply to understand whether their advice falls within the Australian Financial Services licensing exemption, and provides a few examples to illustrate how the exemption works.
- The guidance also explains the relationship between the exemption from the definition of providing ‘financial product advice’ (in s766B(5)(c) of the Corporations Act) and the exemption from the definition of for providing a ‘financial service’ for giving tax advice (in r7.1.29(4) of the Corporations Regulations).
- In addition, ASIC has made amendments to INFO 216 to further clarify what accountants can do when referring a client to an AFS licensee or representative for financial advice.
Background for SMSF services
This information sheet (INFO 216) is for accountants who provide services relating to self-managed superannuation funds (SMSFs). These services are referred to as ‘SMSF services’ in this information sheet. It covers:
- how the Australian financial services (AFS) licensing regime applies to SMSF services provided by accountants, and how the law applying to accountants has changed from 1 July 2016
- the various SMSF services accountants might provide, and whether a licensing exemption applies to them or whether accountants must be covered by an AFS licence for that service.
Under s766B(5)(c) of the Corporations Act, a registered tax agent or BAS agent can provide advice, without having an Australian Financial Services license, for advice given in the ordinary course of their activities and which is reasonably regarded as a necessary part of those activities.
Under r7.1.29(4) of the Corporations Regulations, a person can give advice about the taxation implications of a ‘financial product’, if (amongst other things) the person gives a notice stating that the advice does not constitute financial product advice’, or, if it is: that the person is not licensed to give that advice, tax is only one of the issues associated with buying such a product, and that the client should consider getting advice from the holder of an Australian Financial Services Licence. in essence, the person giving the tax advice must give a disclaimer if the advice does constitute ‘financial product advice’.
6.5.18
[ASIC website: media release 18-115MR; FJM; LTN 78, 26/4/18; Tax Month – April 2018]
Study questions (answers available)
- Can advice given about SMSF’s require an accountant to obtain an Australian Financial Services Licence?
- Is there an exemption for advice given in the ordinary course of a professional’ activities (if a necessary part of those activities)?
- Might a BAS or Tax Agent have to give a ‘disclaimer’ when giving tax advice about a financial product?
