The corporate regulator says it has amended ASIC Corporations (Recognised Accountants: Exempt Services) Instrument 2016/1151 to address a clear regulatory anomaly.
The amendments that have been made will enable full AFS licensees and authorised representatives of full AFS licensees with limited authorisations to provide exempt tax advice under regulation 7.1.29(4) of Corporations Regulations 2001 in relation to financial products not covered by their AFS licence, ASIC said in the statement yesterday.
“These amendments mean that full AFS licensees are not disadvantaged in relation to advice on taxation issues compared to limited licensees [who] are licensed to provide a limited range of financial services relevant to SMSFs, or those without any AFS licence,” the corporate regulator said.
ASIC also said it has updated Information Sheet 216 FS licensing requirements for accountants (INFO 216) for those who provide SMSF services to reflect the amended instrument.
The corporate regulator explained it introduced Instrument 2016/1151 at the end of 2016 to address a regulatory anomaly for limited licensees in relation to regulation 7.1.29(4).
“Regulation 7.1.29(4) enables a person to provide advice on taxation issues, including advice in relation to the tax implications of financial products, without an AFS licence,” it said.
“If the tax advice is also financial product advice to a retail client, this exemption is only available if accompanied by a written warning which states, among other things, that the person providing the advice is not licensed to provide financial product advice.”
ASIC said limited licensees could, therefore, not comply with the requirement to provide a written warning that they weren’t licensed.
“Therefore, they could not rely on the exemption to provide advice to retail clients on the tax implications of financial products which are not covered by an authorisation in their licence, nor could they provide the advice under their limited licence where their licence did not cover the financial product which is the subject of the advice,” it said.
“The instrument addressed this regulatory anomaly by enabling limited licensees and their authorised representatives to provide a modified warning in order to provide exempt advice on the tax implications of financial products that are not covered by their authorisations.”
Since the instrument was introduced, however, ASIC said it identified that this was also an issue for authorised representatives with limited authorisations under full AFS licences, as reported by SMSF Adviser.
The corporate regulator said recent amendments will enable full AFS licensees and their authorised representatives to provide a modified warning under sub-paragraph 7.1.29(4)(c)(ii).
“These amendments put full AFS licensees and authorised representatives of full AFS licensees with limited authorisations on the same footing as limited licensees and authorised representatives of limited licensees, with regard to being able to provide exempt advice under regulation 7.1.29(4),” it said.