ASIC clarifies 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.

The amendments to the record-keeping obligations:

  • place beyond doubt 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
  • make 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.

‘Advice licensees have ultimate responsibility for the advice given by their representatives and need to be able to monitor and supervise their representatives,’ ASIC Deputy Chairman Peter Kell said.

‘Consumers should have trust and confidence that advice licensees have access to their representatives’ records so they can monitor the advice given by their representatives and remediate consumers if something goes wrong,’

Although the amendments to the advice licensees’ obligations clarify, rather than amend, those obligations, ASIC recognises that some advice licensees may nevertheless need to make changes to their systems as a result of the class order. Therefore, ASIC 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.

Our facilitative compliance approach 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.

ASIC consulted with industry on its proposal to clarify the record-keeping obligations together with proposed guidance on review and remediation conducted by advice licensees, in December 2015 (refer: 15-388MR).

ASIC today released a report summarising the key feedback ASIC received in response to Consultation Paper 247 Client review and remediation programs and update to record-keeping requirements (CP 247) and our response to that feedback.

ASIC has also made a minor amendment to [CO 14/923] to restore the original policy intent of the class order so that the exemption to the record-keeping obligations only applies where the modified best interests duty applies.



On 16 December 2015, ASIC released Consultation Paper 247 Client review and remediation programs and update to record-keeping requirements (CP 247) seeking feedback on proposed guidance on review and remediation conducted by AFS licensees that provide personal advice. The consultation paper also sought feedback on clarification to the record-keeping requirements for AFS licensees relating to the best interests duty (refer: 15-388MR).

Submissions received were generally supportive of ASIC issuing guidance on review and remediation. Submissions were also generally supportive of ASIC’s proposed amendments to the AFS licensee record-keeping requirements when providing personal advice.

ASIC released guidance on review and remediation in September 2016 (refer: 16-311MR).

© Australian Securities & Investments Commission. Reproduced with permission.