Blog Layout

Better protection for consumers: new ASIC powers
Liz Gibbs • January 2, 2020

In response to the recommendations of the Banking and Financial services Royal Commission and the ASIC Enforcement Review Taskforce Report, the government has proposed new enforcement and supervision powers for ASIC to restore consumer confidence in the financial system, particularly in relation to financial advice. These new powers include enhanced licencing, banning, warrant, and phone tap powers, all designed to ensure that avoidable financial disasters uncovered during the Royal Commission never repeats again.

While the Banking and Financial Services Royal Commission seems long ago in the minds of many, the people that have been financially affected by dubious practitioners will no doubt carry the scar of mistrust for life. This then, is precisely why the government has introduced new laws which will give ASIC new enforcement and supervision powers in relation to the financial services sector to weed out the "bad apples" and restore consumer confidence.

The new measures seek to strengthen ASIC's licencing powers by replacing the AFS licence requirement that a person be of "good fame and character" with an ongoing requirement that they be a "fit and proper person" at both the time of application and subsequently. This applies to all officers, partners, trustees and controllers of the applicant applying for the AFS licence.

The "fit and proper person" requirement will also apply to existing AFS licensees to ensure that ASIC is able to monitor the controllers of existing AFS licensees, request relevant information, and carry out enforcement action as required.

In working out whether a person is a "fit and proper person" ASIC will consider matters including whether the person has been convicted of an offence in the last 10 years, whether they've had an AFS licence or Australian credit licence suspended or cancelled, and whether a banning or disqualification order has previously been made.

ASIC's banning powers will also be expanded to situations where they have reason to believe that a person is "not a fit and proper person" or is "not adequately trained or is not competent" to:

  • provide financial services;
  • perform functions as an officer of an entity that carries on a financial services business; or
  • control an entity that carries on a financial services business.

In addition, under these new powers, ASIC may also make a banning order against a person that is insolvent under administration, has, at least twice, been an officer of a corporation that was unable to pay its debts, or has, at least twice, been linked to a refusal or failure to give effect to an AFCA determination.

To support these enforcement functions, ASIC's warrant and phone tap powers have been beefed up. It is no longer required to forewarn those under investigation that it may apply for a search warrant. It is also no longer required to specify the exact books or evidential material that can be searched and seized. Interception agencies (ie police, ASIO, and anti-corruption bodies) will be able to provide ASIC with lawfully intercepted telecommunications information in some instances and ASIC staff will be able to use and record the received information as well as communicate the information to another person in investigations and prosecutions.

All of which means that there will be a decreased risk of evidence destruction or alteration. If these measures become law, ASIC's ability to launch and progress investigations to protect consumers from dodgy practitioners will be greatly enhanced. Ensuring that avoidable financial calamities uncovered during the Royal Commission that ruined so many lives will never be repeat again.

Want to find out more?

If you would like to keep up-to-date with the latest developments in financial services and the outcomes from the Banking and Financial Services Royal Commission, contact us today.  

IMPORTANT: This communication is factual only and does not constitute financial advice. Please consult a licensed financial planner for advice tailored to your financial circumstances
 Email us at Robert Goodman Accountants at 
.  © Copyright 2020
 
Thomson Reuters. All rights reserved.
 
Brought to you by Robert Goodman Accountants. 
 
Office open
By Liz Gibbs March 10, 2025
With thanks to all Energex and Emergency services Crew, our electricity has been reconnected and our office is open from today 11 March. We hope you and your loved ones are safe and well following cyclone Alfred. These past few days have been challenging for many, and our thoughts are with everyone affected.
By Liz Gibbs March 10, 2025
Due to a power outage affecting the entire Samford area, the RGA Practice will be operating remotely today, 10 March, until electricity is restored. Please be assured that our team remains available and can be reached at 07 3289 1700. We appreciate your understanding and support during this time. Stay safe, and we look forward to seeing you soon.
Cyclone Alfred
By Liz Gibbs March 5, 2025
As Tropical Cyclone Alfred approaches, we want to remind everyone to take necessary precautions and ensure their safety. We have received some important information that we believe is crucial to share with you to help you prepare for the severe weather conditions ahead.
Work Health and Safety (Sexual Harassment) Amendment Regulation 2024
By Liz Gibbs February 26, 2025
In a significant move to combat workplace sexual harassment, Amendments to the Work Health and Safety Regulation 2011 (as per the Work Health and Safety (Sexual Harassment) Amendment Regulation 2024) will soon commence on 1 March 2025.
By Liz Gibbs February 25, 2025
The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025.
What happens to your super when you die?
By Liz Gibbs February 25, 2025
The Government has announced its intention to introduce mandatory standards for large superannuation funds to, amongst other things, deliver timely and compassionate handling of death benefits. Do we have a problem with paying out super when a member dies?
By Liz Gibbs February 25, 2025
If credit card surcharges are banned in other countries, why not Australia? We look at the surcharge debate and the payment system complexity that has brought us to this point. In the United Kingdom, consumer credit and debit card surcharges have been banned since 2018. In Europe, all except American Express and Diners Club consumer surcharges are banned. And in Australia, there is a push to follow suit. But, is the issue as simple as it seems?
Babyboomer wealth
By Liz Gibbs February 25, 2025
“Succession planning, and the tax risks associated with it, is our number one focus in 2025. In recent years we’ve observed an increase in reorganisations that appear to be connected to succession planning.” ATO Private Wealth Deputy Commissioner Louise Clarke.
Penalty for False R&D claims
By Liz Gibbs February 25, 2025
A joint investigation involving the ATO found that, between 2014 and 2017, a Sydney business coach promoted unlawful tax schemes encouraging clients to lodge over-inflated, inaccurate or unsubstantiated research and development ('R&D') tax incentive claims
SMSF lodgement due dates
By Liz Gibbs February 25, 2025
All trustees of SMSFs with assets (including super contributions or any other investments) as at 30 June 2024 need to lodge an SMSF annual return ('SAR') for the 2023/24 financial year.
More Posts
Share by: