The Corporations Amendment (Professional Standards of Financial Advisers) Bill 2016 was introduced on Wed 23.11.2016 in the House of Reps.
It proposes to amend the Corporations Act 2001 to:
- set new education and training standards (education standards) in proposed new Div 8A of Pt 7.6 of the Corporations Act that must be met by individuals who provide personal advice on relevant financial products to retail clients (relevant providers). The first 3 education standards are that the person must:
(i) complete a bachelor or higher degree, or equivalent qualification, approved by the body (which may include an international course or a course that is not delivered by a university provider);
(ii) pass an exam approved by the body; and
(iii) undertake at least a year of work and training (professional year) that meets the requirements set by the body.
The 4th education standard is an obligation to meet the requirements for CPD set by the body;
- provide transitional arrangements that apply to existing advisers;
- establish a new requirement that relevant providers (eg a financial services licensee, an authorised representative of a financial services licensee, an employee of a financial services licensee) comply with a Code of Ethics (Code);
- establish an obligation on an Australian Financial Services Licensee (licensee) to ensure that its relevant providers comply with the new education standards, and are covered by a compliance scheme (Scheme);
- establish a restriction on the use of the titles “financial adviser” and “financial planner” so that they can only be used by persons who are relevant providers;
- make amendments to the content requirements for the register of relevant providers (Register);
- make provision for appropriate sanctions where a relevant provider or licensee fails to comply with the new obligations; and
- provide for recognition of a new standards body (Body) which will set the details of the new education standards and develop the Code.
Transitional arrangements will apply to “existing providers” (ie those advisers who are relevant providers before the new requirements come into effect). A restriction on the use of the titles “financial adviser” and “financial planner” will also be introduced so that they can only be used by a person who is authorised to provide personal advice to retail clients on relevant financial products.
DATE OF EFFECT: The substantive provisions in Schedule 1 commence on the earlier of a date set by proclamation or 6 months after the day the Bill receives Royal Assent. This is designed to ensure that the Bill commences at the same time as the Corporations Legislation Amendment (Professional Standards of Financial Advisers) Regulation 2017.
The preliminary sections commence from the date of Royal Assent.