The Australian Securities and Investments Commission (ASIC) has issued a reminder to Australian Financial Services (AFS) licensees about upcoming notification requirements for the experienced provider pathway for financial advisers.
In addition, the market watchdog called for stronger supervision of business communications by market intermediaries.
ASIC Sets Deadline for Financial Advisers' Experienced Provider Pathway Notifications
Starting July 1, 2024, AFS licensees will be required to notify ASIC when they receive a written declaration from a financial adviser eligible for the experienced provider pathway. This pathway allows experienced advisers to meet qualification standards without additional education.
Licensees will have 30 business days to notify ASIC after receiving a declaration. For declarations received before July 1, the 30-day countdown begins on that date. Notifications can be submitted through ASIC Connect's appointment and maintenance functions.
The experienced provider pathway, introduced on September 21, 2023, allows eligible financial advisers to satisfy qualifications and professional year standards by making a written declaration. Advisers must provide this declaration to their AFS licensee as soon as practicable.
ASIC has provided guidance in the information sheet on how licensees can verify an adviser's eligibility for the pathway. However, the regulator noted that the Financial Advisers Register will not display information about an adviser's use of this pathway.
“An ‘experienced provider’ is a person who: was a relevant provider for at least 10 years (that is, 3,650 days – whether consecutive or not) during the period 1 January 2007 to 31 December 2021, and had a clean disciplinary record as at 31 December 2021,” ASIC explained in the Information Sheet.
Self-licensed financial advisers who qualify for the experienced provider pathway must also adhere to these notification requirements, with similar deadlines applying to their declarations.
ASIC warned that failure to comply with these notification timeframes could result in criminal or civil penalties.
Last month, in a separate initiative, the Australian regulator also announced the launch of its new Professional Registers Search (PRS) tool, scheduled to become operational in late June 2024. The PRS is designed to offer users enhanced search functionality, allowing them to look up licenses and registrations across multiple register databases with a single query.
ASIC Tightens Oversight on Market Intermediaries
In a separate announcement, ASIC called on market intermediaries to strengthen their supervision of business communications. The regulator released another information sheet, addressing concerns about the use of unmonitored and encrypted communication channels in business dealings.
ASIC is calling on market intermediaries to strengthen their supervisory arrangements for recording and monitoring representatives’ business communications https://t.co/vMC81v6rsp pic.twitter.com/rho0rdm4qk
— ASIC Media (@asicmedia) June 26, 2024
The document provides practical guidance for investment banks, market participants, securities dealers, and corporate advisers on embedding supervisory arrangements for business communications. It emphasizes the importance of preventing, detecting, and promptly addressing misconduct and contraventions of financial services laws.
“Bankers, dealers and market participants have important roles as gatekeepers to Australia’s financial markets and stewards of market integrity,” said Simone Constant, the ASIC Commissioner.
Additionally, Joe Longo, the Chairman of ASIC, has called for reforms in the regulation of artificial intelligence (AI) within the finance sector. He warned that existing frameworks might not be sufficient to keep up with the rapid pace of technological advancements.
