Record-keeping obligations for financial services licensees

ASIC has clarified financial advisers’ record-keeping obligations by way of an amendment to Class Order [CO 14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice.

ASIC Corporations (Amendment) Instrument 2016/1006 amends [CO 14/923] to clarify that, when an advice licensee or one of its representatives provides personal advice, the advice licensee must ensure not only that client records are kept, but also that the advice licensee continues to have access to these records during the period in which they are required to be retained.

ASIC has also amended [CO 14/923] to place a direct obligation on authorised representatives who are advisers to keep records in relation to the personal advice they provide to clients, and to give these records to the advice licensee if the licensee requests the records, provided that the request is made in connection with the advice licensee’s obligations in Ch 7 of the Corporations Act 2001 (Corporations Act).

This addresses licensees’ concerns that they would encounter difficulties with advisers who moved to a different advice licensee and who did not cooperate with a request to access documents, even where contractual arrangements existed.

The Class Order:

  • confirms that Australian financial services (AFS) licensees must have access to records for the period of time in which the records are required to be kept, even if a person other than the licensee holds the records; and
  • makes explicit that authorised representatives who are advisers must keep records, and give the records to their authorising licensee if the licensee requests the records for the purposes of complying with financial services laws.

Under new section 912(G)(4) of the Corporations Act, authorised representatives have a statutory obligation to, not only maintain records for a period of 7 years, but to also provide access to those records to a licensee, regardless of whether the authorised representative is an authorised representative of the licensee at the time of request.

These obligations continue after the authorised representative ceases to be authorised by a licensee.

Compliance enforcement relief

ASIC recognises that some advice licensees may need to make changes to their systems as a result of the class order. ASIC says it will take a facilitative compliance approach for the first six months in relation to the obligation on advice licensees to ensure that they have access to records.

ASIC’s facilitative compliance approach only applies where advice licensees make a good-faith attempt to comply with the obligation but are unable to do so because of, for example, the need to make systems changes. This facilitative period will end on 26 April 2017.


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