ASIC has issued Class Order [CO 04/909] to assist Australian authorised deposit-taking institutions (ADIs) that use agents to provide their banking services under the Corporations Act 2001 (the Act) in relation to basic deposit products.
It is ASIC’s view that when an agent helps to open a bank account, they may be ‘arranging’ to issue a financial product within the meaning of the Act.
Class Order [CO 04/909] allows agents appointed by an ADI to arrange for the issue of a basic deposit product without the need to be licensed or to be formally appointed as an authorised representative under the Act.
Under the Class Order, the ADI will be fully responsible and accountable to clients for the activities of their agents. This includes responsibility for ensuring their agents satisfy and continue to meet all relevant legislative and regulatory standards on conduct competency, as well as complying with the disclosure obligations imposed on providing entities under the Act.
Under the ASIC relief, a customer using an ADI approved agent to open their bank account will:
A key feature of the relief is that any money deposited with an agent will have the same protections that would be available if the money was deposited directly with the ADI, and that clients will have equivalent legal rights against the ADI should that be necessary.
In order to take advantage of the class order, the ADI needs to provide ASIC with notice in writing of its intention to rely on the relief.