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Viewing 15 posts - 1 through 15 (of 35 total)
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  • in reply to: Illiquid Fund Redemptions #4716

    Hi Lidis,


    Thanks for the question.


    The fund’s obligations will depend on whether you are a reporting entity, and thus required to comply with the AML/CTF legislation. Additionally, you should be aware that refunding money to third parties represents an increase in ML/TF risk.


    In short, this is a complex legal question and a range of laws apply. We would recommend that you seek professional legal advice. Please feel free to contact our financial services team.



    Hi Paul/Kath/Sarah,

    Quick query. Is it a minimum requirement for individuals who are in a back office/credit support role only to complete the Certificate IV in Credit Management by 2014?  

    in reply to: Advising clients on PAMM account traders #3135

    Hello Nufty,

    I agree with Chris. Your AFSL needs to

    cover the right activities.

    in reply to: Private Forex PAMM Acccount #3133

    Hi Moidart,

    If you are looking for an AFSL holder or at becoming an Authorised Representative to run a PAMM, I can help you with this. You can contact me at

    in reply to: How do I display my ACL number? #3131

    Thanks Kathryn.

    Much appreciated.

    in reply to: How do I display my ACL number? #3130

    In relation to displaying your ACL number, ASIC clarified that when the licensees ACL number is to be displayed it must be displayed as ‘Australian Credit Licence number 12345’, not ‘ACL 12345’.  However, if a licence number is referred to in a document more than once, it will be sufficient for the full description of the licence to be used once, and the abbreviated form to then be used in the remainder of that document.  There is no such requirement under the AFSL regime meaning it is sufficient to state your AFSL number as ‘AFSL 12345’.


    Further, there is no exemption for businesses who hold both licensees.  The requirements of each regime need to be met.


    Finally, there is no requirement to display your ACL number on business cards.  See our previous post ‘Obligation to Display your ACL number’ for further information.


    Author: Kathryn Wardrobe


    in reply to: How do I display my ACL number? #3129

    Hi Kathryn,

    Thank you for the information.
    If a company is also running an AFSL, does this requirement still apply? Are there certain provisions that exempt a business that run both an AFSL and ACL? 
    I only ask this because it would quite simply be overcrowded to include “AFSL & Australian Credit Licence ######”, especially on an advertisement. Would this also apply to business cards? I’ve searched around and can’t seem to find an answer for this.

    in reply to: FSG #3125

    Well David, very good question. Here at Compliance Specialists Australia we see this often and the facts are, AR’s cannot operate under the FSG of their licensee. In practice, the FSG of the licensee is fundamentally different from the AR in respect to authorised products and services and numerous other material particulars. The licensee should assist and approve the FSG of the AR, only after review and tailor making to the needs and requirements of the AR. Should you need further clarification, please call one of our specialist’s staff.

    in reply to: FSG #3127

    The providing entity, whether it is the licensee or the AR, needs to give an FSG when it provides financial product advice to retail clients. One licensee can prepare an FSG for all of its ARs to give out, provided that it meets the content requirements in the Corps Act; one of these requirements is to list the authorised representatives.

    Do the licensee’s FSGs being given out by the ARs you have seen state that the providing entity is an AR of the licensee? If not, there may be an issue.
    If you have any specific concerns, you can contact our office and speak to one of our financial services lawyers for advice.
    Author: Sam Hills
    Co-contributor: Sarah Holley 
    in reply to: Risk profiling #3123

    Allow me to answer the question plainly…there is absolutely no obligation under law to complete a risk profiling questionnaire when providing investment advice.
    In FoS circular 6 (Winter 2011), it is outlined quite clearly:
    “FSPs that provide personal financial advice to retail clients are obliged to ensure the financial products they recommend are suitable having regard to each client’s objectives, financial situation and needs. An important part of an FSP’s assessment of a client’s objectives, financial situation and needs is the knowledge of the client’s tolerance to risk.”
    In respect of these tolerances, one need look no further than RG175, specifically 175.125 where the two tolerance tests are 175.125 (d) and (e) 175.125 “
    Where advice relates to financial product(s) with an investment component, we consider that the ‘relevant personal circumstances’ of the client will normally include the client’s:
    (d) tolerance of the risk of capital loss, especially where this is a significant possibility if the advice is followed;
    (e) tolerance of the risk that the advice (if followed) will not produce the expected benefits.
    The FoS Circular continues:
    “There is no mandated method of risk profiling and a number of methods have been developed by FSPs, including:

    • risk profile questionnaires
    • the risk tolerance line method
    • the life-cycle approach, and
    • the sensitivities analysis approach

    Most importantly, FOS notes that:
    “FOS also recognises that skilled advisers can secure their clients’ informed consent without using risk profiling tools.”
    And finally:
    “Regardless of whether risk profiling tools are used or not, FSP’s must keep detailed records that show they secured their client’s informed consent (Ed: and dare I say the emphasis is on “informed”) about the level of risk required to achieve their objectives. Without these records, FSP’s have greater difficulty defending claims involving the adequacy of their risk profiling practices and procedures.”
    I sometimes wish FOS had separated or extinguished the last sentence because it glosses past the importance of the prior sentence which is that FSP’s must keep detailed records of the level of risk REQUIRED to achieve goals and objectives. This distinction is extremely important. It is the risk required, not the risk your client is comfortable taking, which is all that risk profiling questionnaires can hope to achieve.

    in reply to: Risk profiling #3122

    Outside of Finametrica, has anyone got any really good examples of risk profiling questionnaires?
    Specifically, I am looking for questions around gearing and borrowing to invest.

    We’ve summarised ASIC’s article and put in a bit of our own commentary, here:–NTA–Requirements-fo.aspx


    in reply to: Adviser incentives #3120
    The new ban on conflicted remuneration will shake-up the traditional approach to providing incentives to advisers, but there remain several alternatives to reward performance.
    It is helpful to remember that the ban is complementary to the ‘best interests’ duty – remuneration will only be banned if it presents a conflict between the interests of the adviser and the client.  For example, licensees, advisers and platform operators can still receive volume-based payments if they can prove that the benefit will not influence the financial service advice or product recommendation given to retail clients – consider the weighting, causation and proximity of the reward.
    Licensees are looking at new ways to reward advisers.  Some examples of incentives that comply with the amendments are fee for service structures, benefits that have a genuine and relevant education and training purpose, IT software or support related to the provision of financial product advice, bonus arrangements calculated using a genuine ‘balance scorecard’ and rewarding advisers that demonstrate exemplary compliance behaviour.
    Many employers have already begun to align their practice with the reforms and are creating new ways to provide incentives for and reward employees (despite the ban not being mandatory until 1 July 2013 or earlier if you opt in).  It is a good idea to make the most of the transition period and begin to trial different approaches to allow you time to find the best alternative for your workplace before 1 July 2013.
    Please contact our team if you seek further information.
    Co-contributor: Sarah Holley

    The proposed reforms are now clarified, and will come into effect from 31 January 2013.  Here is ASIC’s article clarifying the issue:


    Big thanks to you both on this. I’ve got some reading ahead of me.

Viewing 15 posts - 1 through 15 (of 35 total)
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