ASIC relaxes rules to help virus fight

Australia’s corporate watchdog will relax rules around providing financial advice and push back some investigations.

Australia’s corporate watchdog will relax rules around providing financial advice and push back some investigations but warned it will not walk away from policing several key areas as the financial system scrambles to respond to the coronavirus.

The Australian Securities and Investments Commission has said it will delay consultations, regulatory reports and reviews, as well as ending onsite supervisory work, such as the Close and Continuous Monitoring Program.

ASIC will relax rules around financial advice in a bid free up access to the government’s flagship relief package allowing early access to superannuation for those who had lost their job or seen their work hours or business income fall by 20 per cent or more.

ASIC chair James Shipton recognised the financial services sector was under huge strain, noting the special measures needed to assist people who would draw on their superannuation.

“To assist firms, ASIC will limit the regulatory activity that they will need to respond to as much as possible. We are also working with the financial industry to identify other areas where we can provide support,” he said.

“However, it is important to note that this is not an abrogation of our regulatory work, but a recognition that some existing activities and new tasks must take precedence over work we would otherwise be doing.”

For those looking to access their super, advisers will not be required to give a statement of advice and registered tax agents will not be required to hold an Australian financial services licence.

A temporary “no-action position” will be taken by ASIC for super trustees to expand the scope of personal advice that may be provided by, or on behalf of, the trustee as “intra-fund advice”.

ASIC flagged the measures were temporary, noting that the no-action position would end when applications to the scheme were no longer being accepted.

The corporate watchdog said it would consult with stakeholders and give the industry 30 days notice before walking back the relief.

However, ASIC would continue to offer key functions, putting tax agents and trustees on notice to ensure they act in the best interests of their clients.

ASIC has said it would work remotely to monitor firms and continue to use established working arrangements with senior executives to supervise firms.

Measures to support consumers who may be vulnerable to scams and poor advice and market supervision work would all be stepped up. Mr Shipton said it was important that everyone in the best interests of consumers.

“ASIC is being especially vigilant in addressing predatory practices, scams and fraud,” he added.