Accountants: Update on the removal of the Accountant's Exemption and the new streamlined process

 

Ordinarily, professionals who provide advice in relation to superannuation products (which include SMSFs) are obliged to hold an Australian Financial Services Licence (an "AFSL").  However, since 2004, accountants who are "recognised accountants" within the meaning of Corporations Regulation 7.1.29A have been exempt from the requirement to either hold an AFSL or to be an authorised representative of an AFSL when providing advice relating to the acquisition or disposal of interests in SMSFs.  This is referred to as the "Accountants' Exemption".  The Commonwealth Government announced in April 2010 that the exemption permitting accountants to provide advice on the establishment and closing of SMSFs without holding an AFSL would be removed.

The Corporations Amendment Regulation 2013 (No. 3) makes several amendments to the Corporations Regulations 2001.  The amendments remove from 1 July 2016 the current exemption which allows accountants to provide financial advice related to SMSFs without an AFSL.  The Regulations also provide alternative licensing arrangements for accountants from 1 July 2013.  The intention of these amendments is to provide a 3 year transition period for accountants using the existing Accountants' Exemption to transition to the new regulatory licensing regime.

In summary, the Corporations Amendment Regulation 2013 (No. 3) provides:

 

Whilst the limited licence expands the advice which accountants may give, there are still practical issues relating to the limited licence, including Regulations that still need to be considered by ASIC – and which should be the subject of Regulatory Guidance issued by ASIC.  Regulation 7.6.01BA(4) defines "limited financial services" as:

 

However, there still appear to be a number of practical issues that require further ASIC guidance before it is clear how limited licences will operate in practice.  We look forward to further details being released.

Licensee Solutions provides high quality licensing services and advice.  If you are an accountant or SMSF specialist, and you are considering your licensing options, we can assist you with realistic and practical advice as to the real costs and obligations of having your own licence, in comparison with being an authorised representative of a bank, life office, or other financial institution.  Both can have their advantages and disadvantages.

Our principals have run a financial planning company with its own licence, and they have acted for more than a hundred licensees, so they have real hands-on experience.

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3 February 2014