This follows the government announcement that it would accelerate the establishment of a single disciplinary body for financial advisers.
This disciplinary body will displace the role of compliance schemes in monitoring and enforcing the Financial Planners and Advisers Code of Ethics 2019 (the code).
As a result, compliance scheme applicants have withdrawn their applications to Asic for approval of their compliance schemes.
This means the compliance scheme regime will not be able to proceed at this time.
Asic will take immediate action to provide certainty for AFS licensees that they will not be in breach of the law because their financial advisers were not able to register with an ASIC-approved compliance scheme by 1 January 2020, as originally required.
The Australian watchdog will grant a three-year exemption to all AFS licensees from the obligation in the Corporations Act 2001 to ensure that their financial advisers are covered by a compliance scheme, and from the associated notification obligations.
AFS licensees will still be required to take reasonable steps to ensure that their financial advisers comply with the code from 1 January 2020, and advisers will still be obliged to comply with the code from that date onwards.
Asic may take enforcement action where it receives breach reports.
Licensees do not need to take any action at this time. Asic will make a public announcement when the exemption takes effect.