Reporting changes for AFSLs
On 3 June 2022, ASIC announced a new financial reporting requirement for Australian financial services (AFS) licensees, following changes to accounting standards.
Under the new reporting requirement, AFS licensees’ financial reports must be prepared under standards set by the Australian Accounting Standards Board (AASB) and must contain disclosures consistent with the financial report of other for-profit entities.
The AASB’s new reporting regime will apply to the Chapter 7 financial reports for most AFS licensees, using the public accountability test.
The new disclosure requirements apply from 1 July 2021, but licensees can choose to defer any new disclosure requirements by one year.
Draft Cost Recovery Implementation Statement 21-22
On 6 June 2022, ASIC released its draft Cost Recovery Implementation Statement (CRIS) for 2021-22. The draft CRIS outlines ASIC’s estimated regulatory costs for 2021-22 and its proposal to recover the costs under the industry funding model.
Final industry levies will be based on ASIC’s actual regulatory costs and business metrics submitted by entities in each subsector. The final levies will be published in December 2022 with invoices to be issued between January 2023 and March 2023.
The submission period closed on 28 June 2022.
Information sheet on warnings and reprimands
The requirement for the Financial Services and Credit Panel (under ASIC) to give warning and reprimands to financial advisers in specific circumstances was introduced by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Cth), and this requirement took effect on 1 January 2022.
On 9 June 2022, ASIC released Information Sheet 270 Warnings and Reprimands (INFO270) which explains:
- what warnings and reprimands are;
- when ASIC will give a warning or reprimand;
- how ASIC will communicate the provision of the warning or reprimand;
- when and to whom ASIC will provide procedural fairness before issuing a warning or reprimand; and
- the adviser’s right of review ASIC’s decisions.
Adviser exam results - May
On 20 June 2022, ASIC released the results from the May 2022 financial adviser exam.
Of the 496 candidates who sat the exam, 42.7% passed. In releasing the results, ASIC has also stated that to date, over 20,000 candidates have sat the exam and over 91% of those candidates have passed.
The next exam sitting in 2022 will be held from 28 July 2022 to 1 August 2022. For advisers who are looking to enrol in the next sitting, the enrolment period will close on 12 July 2022. The next exam sitting is also the last opportunity for financial advisers operating under the 9-month extension to pass the exam prior to the deadline of 1 October.
From 1 October 2022, all financial advisers must have passed the exam to provide personal advice.
Underperformance communication by super trustees - warning
On 24 June 2022, ASIC released their findings from its review of superannuation trustees’ communication to its members following the first annual MySuper product performance test.
The review found that trustees of products that failed the test generally complied with their legal obligation of notifying their members of the failed test and disclosed the result on their websites. However, the communication strategies of some trustees may have risked confusing or misleading member’s about their product’s performance and ASIC expects trustee communication for the 2022 performance test to reflect their expectations for prominence, balance and clarity, as set out in ASIC Report 729 Review of trustee communications about the MySuper performance test (REP729).
