THE COMPLEX financial services reforms to be put in motion by 11 March may have impacts not yet anticipated by the corporate regulator but which could emerge over the next 12 months, it has been revealed.
The Australian Securities and Investments Commission (ASIC) confirmed it would continue to consult with industry and consumer groups over the next year as the Financial Services Reform Act (FSRA) 2001 “beds down”.
ASIC took part in the FSRA implementation phase with the issuing of new licences and the provision of relief from the law.
But the Commission intends to continue to consult with industry and consumer groups following the transition period to identify problems and give guidance on them, as well as providing appropriate relief. “As with any major law reform, issues may continue to be identified which need to be addressed by ASIC,” said Commission acting chairman Jeffrey Lucy.
During the transitional period, ASIC consulted widely, considered applications for relief from the law, and answered several hundred enquiries through its project office and ‘frequently asked questions’ on its website.
The regulator will continue to issue guidance where this will assist consumers and industry to understand and comply with the new law, Lucy said.
The FSRA creates a single licensing and disclosure regime that would “treat different types of investment and risk products as ‘financial products’,” Blake Dawson Waldron partner Michael Vrisakis told Lawyers Weekly.
“Once [the financial products] are shepherded into this legislative holding yard, they can then be regulated by a common set of rules,” Vrisakis said.
A new area of legal practice will be created by the reforms, Vrisakis added, and “it is in fact arguably the most rapidly expanding area of law, both in terms of volume of law but also volume of business”.
Last week the Government announced that accountants giving advice to self-managed superannuation funds would be exempt from financial services reform licensing. Regulations have been made to give effect to this announcement. The custody industry has also been granted exemptions.
But other industries have expressed concerns that parts of the law are too difficult to sort through, and a number of private practice firms have been overwhelmed by the complexity of the legislation they have had to deal with on behalf of their clients.
Head of legal and risk services at BT Financial Group Gai McGrath said complying with the FSR regime had “become an exercise in ticking the boxes”, and that meeting the deadline was just the beginning of the FSR provisions. The real work, McGrath said, was in making the new regime work for businesses.
ASIC’s proposal now is to help industries work through the changes and “continue to issue guidance where this will assist consumers and industry to understand and comply with the new law”, said Lucy.