Certainty Compliance http://www.certaintycompliance.com.au Wed, 12 Aug 2015 02:57:14 +0000 en-US hourly 1 http://wordpress.org/?v=4.3.1 AUSTRAC Industry Contribution http://www.certaintycompliance.com.au/austrac-industry-contribution/ http://www.certaintycompliance.com.au/austrac-industry-contribution/#comments Fri, 20 Feb 2015 01:06:39 +0000 http://www.certaintycompliance.com.au/?p=691 The AUSTRAC Industry Contribution is a means for AUSTRAC to recover its costs from the industry. This was previously known as the AUSTRAC Supervisory Levy. The AUSTRAC Industry Contribution is an annual levy and AUSTRAC are about to issue invoices for the current financial year.

Reporting entities must make sure that AUSTRAC have up to date information about your company and its earnings to ensure that the appropriate contribution amount is applied.

Does this apply to me?
The AUSTRAC Industry Contribution applies to reporting entities that were enrolled with AUSTRAC on the census day – 1 July each year. However certain entities will not be required to a levy.

How is it calculated?
The charging model to calculate the industry contribution has been altered. The contribution amount will vary depending on your circumstances and will be calculated using:
• A Transaction Reporting Component: this is measured by the number of transaction reports and the value of transaction reports; and
• An Earnings Component: this measure is calculated on your earnings and varies depending on the type of business you operate, where you are incorporated and whether you are part of a larger group of companies.

What do I need to do?
As a reporting entity, you must ensure your AUSTRAC Business Profile is updated by 27 February 2015. The industry contribution invoice will be sent during April 2015.

For further information
For more information about AUSTRAC industry contribution and how to calculate the earning components, please visit their website.

Please contact us if you have any question at 02 8324 5300 or enquiries@certaintycompliance.com.au.

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Certainty is at the Asian Financial Forum 2015 http://www.certaintycompliance.com.au/certainty-is-at-the-asian-financial-forum-2015/ http://www.certaintycompliance.com.au/certainty-is-at-the-asian-financial-forum-2015/#comments Fri, 16 Jan 2015 05:56:14 +0000 http://www.certaintycompliance.com.au/?p=685 Certainty Compliance will be joining the Asian Financial Forum (AFF) on 19-20 January 2015 in Hong Kong.

Meet with us at AFF 2015, Hong Kong Convention and Exhibition Centre or contact Michelle East meast@certaintycompliance.com.au

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ASIC Statement on wholesale and retail investors and SMSFs http://www.certaintycompliance.com.au/asic-statement-on-wholesale-and-retail-investors-and-smsfs/ http://www.certaintycompliance.com.au/asic-statement-on-wholesale-and-retail-investors-and-smsfs/#comments Wed, 03 Sep 2014 12:54:49 +0000 http://www.certaintycompliance.com.au/?p=669 ASIC has revised its interpretation, previously published as QFS150, of how the wholesale investor test applies when a trustee of an existing superannuation fund receives advice about how to invest the fund’s assets. ASIC states that it will not take action if the person providing the advice determines the individual trustee is a wholesale client using the general test of the trustee holding net assets of at least $2.5 million or $250,000 gross income over last two financial years, rather than applying the higher $10 million net asset test. ASIC has also clarified that if the advice is about a single investment with a value over $500,000, the trustee will be a wholesale client. This is welcome news for providers of investment advice and those accepting investments from SMSFs.

What does this really mean?

It is important to note that this is a ‘no action’ position rather than a change of law. ASIC has noted that a legal risk remains and that this does not affect private rights of third parties to take action. ASIC has also warned that it will take action against providers who miscategorise clients, e.g. under the general test as a wholesale client without an accountant’s certificate.

Some aspects remain unclear

Uncertainty still remains:
• as to when a service is “advice that relates to superannuation”. If the financial service relates to a superannuation product, the $10 million net asset test is the only applicable test.
• on the calculation of net assets for the general test. For example, whether the assets of the SMSF can be combined with the assets of the trustee to meet the general test.
• on which tests apply when the trustee is not a single individual trustee. For example, when the trustee is a corporate trustee or when there are more than one individual as trustee and one individual does not meet the general test. ASIC also has not clarified if the general test or large transaction test can be used in these circumstances. It would be prudent for advisers and product providers to seek legal advice when the providing services to SMSF with different control structures.

For further information

Certainty can help you meet all aspects of your AFSL obligations. Please contact our office on (02) 8324 5300 or enquiries@certaintycompliance.com.au.

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Future of financial advice (FOFA) amendments http://www.certaintycompliance.com.au/future-of-financial-advice-fofa-amendments/ http://www.certaintycompliance.com.au/future-of-financial-advice-fofa-amendments/#comments Fri, 07 Feb 2014 06:23:18 +0000 http://www.certaintycompliance.com.au/?p=658 The Government has issued draft legislation and regulations for the amendment of FOFA. These are significant changes and reach across each of the main streams of the exiting FOFA legislation.

As foreshadowed in their announcement just before Christmas, proposed amendments include:

  • Conflicted remuneration: the ban will only apply to Personal Advice. General Advice will be exempt from the ban therefore significantly limiting the scope of this requirement. The Government also aims to clarify that the Execution Only exemption applies in circumstances where the benefit is paid directly by the client or by another party where the benefit is given at the direction of the client and with the client’s clear consent.
  •  Scaled advice: clients and advisers will be explicitly allowed to agree on the scope of financial advice to be provided. The existing best interests duty requires that advisers make investigations into their client’s broader objectives, financial situations and needs before providing scaled advice. Under the new regime, advisers need only investigate the client’s objectives, financial situation and needs that are relevant to the scaled advice to be provided.
  •  Opt-in:  remove altogether the requirements for clients to opt-in to ongoing fees arrangements on a regular basis.
  •  Fee Disclosure Statements:  remove the retrospective application so that the requirement only applies to clients that have signed-up post – 1 July 2013. This will significantly reduce the administrative burden for businesses to provide Fee Disclosure Statements to pre 1 July 2013 clients.
  •  Best Interest Duty: remove the catch-all provision (s961B(2)(g)) from the safe harbour approach. This leaves the initial six steps that advice providers can follow to evidence they have acted in the client’s best interest. The existing legislation left a corridor of uncertainty around the lengths required to satisfy this obligation.
  •  Grandfathering: amend grandfathering to allow for adviser movements between licensees

In general, these changes will come into effect from the date the Act is given Royal Assent. Specific timings are outlined in the Draft Explanatory Memorandum.

Your opportunity to submit comments on the proposed changes

You have a short window of opportunity to view and comment on the proposed amendments.  Submissions must be in writing and made by the 19th February 2014 to either Email: futureofadvice@treasury.gov.au or Postal address: General Manager, Retail Investor Division, The Treasury, Langton Crescent, PARKES ACT 2600.

The Future of Financial Advice website contains a copy of the proposed legislation and explanatory statements.

What happens next?

Assuming all goes to plan, the proposed changes will go through Parliament in the 2nd and 3rd quarters of 2014.  Once the amendments are passed, ASIC will go through the process of industry consultation and updating guidance. In the meantime, ASIC has indicated that they “will not take enforcement action in relation to the specific FOFA provisions that the Government is planning to repeal”. However, as noted in the Explanatory Memorandum, “ASIC’s stance does not remove a client’s right to take private action against a provider in the event they feel they are disadvantaged”.

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Market Integrity Rule breach – Pershing trade confirmations http://www.certaintycompliance.com.au/market-integrity-rule-breach-pershing-trade-confirmations/ http://www.certaintycompliance.com.au/market-integrity-rule-breach-pershing-trade-confirmations/#comments Tue, 04 Feb 2014 23:55:47 +0000 http://www.certaintycompliance.com.au/?p=651 Pershing Securities Australia Pty Ltd (Pershing) paid infringement notice penalty of $15,000 for failing to give trade confirmations to retail clients.

The problems were identified in April 2012 when Pershing realised that 701 transactions were executed for which they failed to issue a trade confirmation. The problems occurred between 2010 and 2012 when 37 trading accounts were set up incorrectly by Pershing and third party intermediaries, mainly due to omission or incorrect postal address and email address. As a result, clients did not receive confirmation from Pershing in respect of trades executed on the ASX.

The Market Disciplinary Panel believed that Pershing has breached Rule 3.4.1 of Market Integrity Rule (ASX Market). This rule requires market participants to give a confirmation to the client in respect of each market transaction entered into on the client’s instructions (or MDA).

What does this mean for me?

For market participants, you would be aware of the importance of timely delivery of confirmation to all retail clients. However, it is important that you consider:

  • Are your client on-boarding procedures documented and current?
  • Do your processes adequately address your obligations where certain services are delivered by intermediaries or other third parties?
  • Do you conduct regular reviews to confirm whether accounts are being set-up correctly during the client on-boarding process?

For further information

See the ASIC media release 14-019MR for full details of the announcement and the infringement notice. You can also view the ASIC Market Integrity Rules (ASX Market) on the ASIC website.

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ASIC Markets Disciplinary Panel – January 2014 http://www.certaintycompliance.com.au/asic-mdp-january-2014/ http://www.certaintycompliance.com.au/asic-mdp-january-2014/#comments Thu, 23 Jan 2014 05:05:30 +0000 http://www.certaintycompliance.com.au/?p=643 ASIC has announced details of the latest matter reviewed by the Markets Disciplinary Panel (MDP). This serves as a timely reminder to all market participants to ensure that their trading systems have adequate controls in place to prevent erroneous orders entering the market.

In this case, Citigroup paid a $40,000 fine for an incident that occurred in late 2011 involving order placed on the ASX24 Market by a client with Direct Market Access. The client placed an order that was executed well away from the published daily settlement price. Citigroup’s trading system should have had filters and warnings in place to identify that the order was too far away from the current market. The order should have been rejected.

Following its investigation, the MDP believed that Citigroup breached Rule 2.2.1(1)(b) of the Market Integrity Rules for the ASX24 Market. This rule requires participants to demonstrate ‘prudent risk management procedures’. In particular, participants should establish and document limits for orders, positions and maximum price changes. Limits must be applied to orders for both client and house accounts.  See full details of ASIC’s announcement here.

What does this mean for me

Financial markets are dominated by technology and ASIC has demonstrated its focus on ensuring that trading is fair and orderly. There are a number of Market Integrity Rules (ASX, Chi-X and ASX24) that require participants to maintain control of their trading systems. For participants of these markets, it is important that you consider:

  • Does your trading system have adequate filters and controls in place?
  • Have you regularly reviewed and tested these filters and controls?
  • Are your procedures documented and current?
  • Do you have appropriate security and change management arrangements in place?

AOP System Annual Review and Notification

You should also be aware that a new Market integrity Rule is taking effect this year. Participants of the ASX and Chi-X markets must complete an Annual Review of their AOP Systems by the 1st November each year. Participants must then make an Annual Notification to ASIC with respect to their compliance with the Market Integrity Rules.

Regulatory guidance and supervision

The Citigroup incident is the 21st Infringement Notice issued by ASIC since they assumed control of market supervision in August 2010. Whilst this is the first Notice for breach of this particular Market Integrity Rule, many previous Notices were for breaches of similar rules on the ASX Market. For example, we have seen several breaches for failing to ensure that:

  • Markets remain fair and orderly (MIR ASX 5.9.1)
  • AOP systems have appropriate automated filters in place so as to avoid interfering with market integrity (MIR ASX 5.6.1)

ASIC released guidance on risk management for ASX24 participants in August 2013. Regulatory Guide 250 was issued soon after the release of new and updated Market Integrity Rules for the ASX24 Market. One of the new rules extended existing risk management requirements to house accounts as they previously only covered dealing for client accounts.

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AML/CTF Compliance Report due by 31 March 2014 http://www.certaintycompliance.com.au/amlctf-compliacereport/ http://www.certaintycompliance.com.au/amlctf-compliacereport/#comments Wed, 22 Jan 2014 03:24:07 +0000 http://www.certaintycompliance.com.au/?p=638 Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, a reporting entity who provides ‘designated services’ during any part of the reporting period of 1 January 2013 to 31 December 2013, needs to submit an AML/CTF compliance report to AUSTRAC by 31 March 2014. A reporting entity is an individual, company or other entity that provides a ‘designated service’ as defined in section 6 of the AML/CTF Act. Reporting entities typically include banks, non-bank financial services, remittance (money transfer) services, bullion dealers and gambling businesses.

The AML/CTF Compliance report may ask you about your AML/CTF Program Part A and Part B, your reporting obligations, correspondent banking relationships and electronic fund transfer instructions.

Who can help me preparing my report?
AUSTRAC provides instruction guide for submitting compliance report and a sample of report in their website.
Certainty can also provide professional assistance in preparing your AML/CTF compliance report.

How do I submit a report?
The AML/CTF compliance report is typically submitted electronically via AUSTRAC Online.

What if I don’t submit an AML/CTF compliance report?
Civil penalties may apply if you fail to submit the report by 31 March 2014. Criminal penalties may also apply if you supply false or misleading information or documents to AUSTRAC.

For further information
Certainty can help you meet all aspects of your AML/CTF obligations. We can also assist with an independent external review of Part A of your AML/CTF Program. Please contact our office on (02) 8324 5300 or enquiries@certaintycompliance.com.au.

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ASIC issues class order providing relief for the mFund service http://www.certaintycompliance.com.au/mfund-service/ http://www.certaintycompliance.com.au/mfund-service/#comments Mon, 13 Jan 2014 06:34:51 +0000 http://www.certaintycompliance.com.au/?p=630 ASIC has issued Class Order (CO 13/1621) as to provide relief that facilitates retail clients applying for interests in managed investment schemes through mFund Settlement Service “mFund”.

mFund is a facility jointly operated by ASX Ltd “ASX” and ASX Settlement Pty Ltd “ASX Settlement” where requests for the issue or redemption of interests in unlisted managed investment schemes can be made, and holdings recorded through CHESS.

Class Order (CO 13/1621) exempts Responsible Entities “REs” of Managed Investment Schemes available through the mFund from only issuing interests in response to an application form that was included in or accompanied a product disclosure statement “PDS”. REs will generally be allowed to issue on the basis of an electronic message through mFund indicating that the investor has been given the latest PDS for the scheme.

The sender of the electronic message must be an Australian Financial Services licensee or an Authorised Representative and must not send an electronic message unless the investor has been given the latest PDS for the scheme.

Do you hold an Australian Financial Services License? If not, please contact Certainty on 02 8324 5300 or email to enquiries@certaintycompliance.com.au.

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Certainty is at the Asian Financial Forum http://www.certaintycompliance.com.au/asianfinancialforum/ http://www.certaintycompliance.com.au/asianfinancialforum/#comments Mon, 13 Jan 2014 01:55:38 +0000 http://www.certaintycompliance.com.au/?p=608   Visit us at the Invest in Australia stand, meet with us at AFF Deal Flow or contact Michelle East meast@certaintycompliance.com.au.]]>


Visit us at the Invest in Australia stand, meet with us at AFF Deal Flow or contact Michelle East meast@certaintycompliance.com.au.

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Better Access to Financial Advice http://www.certaintycompliance.com.au/better-access-to-financial-advice/ http://www.certaintycompliance.com.au/better-access-to-financial-advice/#comments Thu, 28 Feb 2013 03:16:23 +0000 http://www.certaintycompliance.com.au/?p=583 What’s New?

27 February 2013

Minister for Financial Services and Superannuation, Bill Shorten, has announced the next step in enabling accountants to offer a wider range of services through regulations to replace the accountants’ licensing exemption with a limited AFSL.

After feedback from industry on the draft regulations in late 2012, the Government has announced that it will finalise the regulations in April 2013.

Currently accountants have an exemption from licensing that allows them to provide advice on SMSFs.

The limited AFSL will be extended to enable accountants to provide more strategic advice to their clients, including advice on “class of product advice” in the following areas:

  • basic deposit products,
  • general and life insurance,
  • securities, and
  • simple managed investment schemes

A streamlined application process will apply from 1 July 2013 to 1 July 2016.

Prior to 1 July 2016, accountants who are members of the ICAA, CPA Australia or the Institute of Public Accountants (IPA) won’t have to demonstrate their experience to ASIC to receive the limited licence.

After 1 July 2016 anyone applying for the licence will need to satisfy the same experience requirements as any other applicant.

How can Certainty help?

Certainty Compliance can assist with your application. We can assist you in understanding all your regulatory obligations, and ensure you have systems, policies and procedures in place to comply with them.

Contact us on enquiries@certaintycompliance.com.au or telephone (02) 8324 5300.

For further information:

See the full Ministerial media release here: No.011

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