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Regulator to focus personal and general advice

February 20, 2019

  

The corporate regulator may be focusing on the dividing line between general and personal advice.

 

“It is important for a regulator to seek clarity from the Court on pivotal statutory provisions within its remit. The dividing line between personal and general advice is one of the most important provisions within the Financial Services Laws. It directly impacts the standard of advice received by consumers. This is why ASIC brought this test case and ASIC believes further consideration by the Full Court of the Federal Court is necessary to better inform consumers and industry,” Australian Securities and Investments Commission (ASIC) Deputy Chair Daniel Crennan said.

 

This is the announcement from ASIC this week, as they seek clarification on the Federal Court ruling on two Westpac subsidiaries: Westpac Securities Administration Limited (WSAL) and BT Funds management Limited (BT Funds).

 

Neither subsidiary can give personal advice under the Australian Financial Services Licence, but it was alleged the subsidiaries breached the Corporations Act for failing in their obligations to provide financial services efficiently, honestly and fairly.

 

However, ASIC failed to make their case based on the fact that personal advice was made to 15 people. In their official statement, the regulator said this was the first time that s766b was being considered by the Federal Court. ASIC appeal the decision for the purposes of clarity between the personal and general advice.

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