Single Disciplinary Body
The Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 put in place the new Single Disciplinary Body (SDB) within ASIC, extending the existing Financial Services and Credit Panel (FSCP). A FSCP may be convened to:
- consider financial planner misconduct and potential breaches of the Corporations Act 2001, including the Legislated Code of Ethics and other legislated professional standards
- apply sanctions where appropriate
- make recommendations for ASIC to take enforcement action against a financial planner
The Single Disciplinary Body commenced on 1 January 2022, giving the FSCP its own statutory function and powers. The powers of the FSCP include:
- direct financial planners to undertake specified training, counselling, supervision or report certain matters to ASIC
- suspension or prohibition a financial planner’s registration
- issuance of infringement notices
- recommend that ASIC commence civil penalty proceedings, and
- acceptance of enforceable undertakings from financial planners.
ASIC will act as the secretariat for the SDB, whilst the FSCP will be made up of members of the industry appointed by the relevant Minister and provide for a peer review mechanism.
In certain circumstances, decisions of the Panel, will be posted on the planner’s registration on the FAR. (See RG263)
Breaches referred to Single Disciplinary Body
The single disciplinary body may consider breaches or likely breaches that are reported under the breach reporting requirements, received through complaints handling mechanisms, or identified through an ASIC investigation.
The new breach reporting requirements include reporting breaches (or likely breaches) of the Code. Rather than capturing all breaches, failing to comply with the Code of Ethics is reportable to ASIC under the new breach reporting regime only if the breach is serious or the ‘deemed significant’ test applies. This is to reduce the number of minor breaches being reported.
A breach is serious if it results in:
- material loss or damage to a client
- material benefit to the financial adviser
- or involves dishonesty or fraud.
Determining whether a breach results, or is likely to result, in material loss or damage to a client depends on the client’s circumstances, including their financial circumstances.
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