Second Reading SpeechMr SUKKAR (Deakin - Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing)
That this bill be now read a second time.
This bill will empower the Financial Services and Credit Panel within ASIC as the single disciplinary body for financial advisers. The panel will be provided with new sanction powers to enable it to fully perform its disciplinary functions, including being able to issue an infringement notice, require that the financial adviser undertake additional training and recommend to ASIC that it seek a civil penalty. The bill will also require all financial advisers who provide personal financial advice to retail clients to be registered.
This fulfils the government's commitment to implement recommendation 2.10 of the financial services royal commission. The royal commission highlighted that the financial advice industry lacked an effective system of professional discipline, as a result of there being too many different pathways for consumer complaints and ineffective sanctions to deal with misconduct appropriately. In addition, while sanctions are available to ASIC, the lack of less serious sanctions means that ASIC generally only focuses on the most serious incidents.
The bill will also provide that tax (financial) advisers will no longer be regulated by the Tax Practitioners Board but instead be regulated only under the Corporations Act 2001. This implements recommendation 7.1 of the Tax Practitioners Board review, which recommended that a new model be developed for regulating tax (financial) advisers in alignment with implementing recommendation 2.10 of the royal commission.
Importantly, the bill also winds up the Financial Adviser Standards and Ethics Authority and transfers its functions to the minister responsible for the Corporations Act 2001 and ASIC.
These reforms will further streamline the number of bodies involved in the oversight of financial advisers, resulting in continuous improvements to the regulatory framework for the financial advice sector and enhanced access for Australians to affordable and quality financial advice.
Finally, the Legislative and Governance Forum for Corporations was consulted in relation to the bill and has approved it as required under the Corporations Agreement 2002.
Full details of the measures are contained in the explanatory memorandum.