ASIC Warns AFS Licensees on New Provider Pathway Rules

The Australian Securities and Investments Commission (ASIC) has reminded Australian Financial Services (AFS) licensees of their new responsibilities under the experienced provider route for financial advisors. The route, which began on September 21, 2023, provides an alternate approach for financial advisors to achieve the credentials and professional year criteria by providing a written statement.

Financial advisors who are qualified for this route must quickly deliver a copy of their declaration to their AFS licensee(s). AFS licensees who receive such declarations must inform ASIC within 30 working days of receipt, beginning July 1, 2024.

ASIC has issued thorough advice in Information Sheet 281, which details how AFS licensees may check the eligibility of financial advisors via the experienced provider route. The appoint (add) and maintain (update) functionalities on ASIC Connect may be used to provide these alerts.

Notably, the Financial Advisers Register will not show whether a financial advisor is using this route. This modification emphasizes the necessity of AFS licensees ensuring compliance with notification obligations in order to avoid possible criminal and civil fines.

The period for alerting ASIC varies depending on when the declaration is submitted. If the declaration is made before July 1, 2024, and the advisor is still permitted on that date, the licensee must inform ASIC within 30 working days. For declarations provided on or after July 1, 2024, notice must occur within 30 business days after receipt.

ASIC, Australia's corporate, markets, and financial services regulator, highlights the importance of these additional duties in ensuring the integrity and openness of the financial advice industry.

About ASIC

ASIC is Australia's corporate, market, and financial services regulator, tasked with ensuring a fair, transparent, and efficient financial system. It supervises and enforces rules that protect consumers, investors, and creditors while also ensuring the fairness and efficiency of Australia's financial markets.