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Do
I need a licence?
What
exemptions might apply to me?
What
should I do now?
Do I need a licence?
Am I providing financial
services?
Generally, the
Corporations Act 2001
(the Act) requires people who
provide financial services to:
- hold an Australian financial services
(AFS) licence; or
- become the representative of a
licensee,
depending on
whether they are acting as a principal or representative.
Under the Act, a person
provides financial services if they carry out certain
activities (eg advising or dealing) in relation to 'financial
products' including securities.
Am I giving financial product
advice?
A person
(including an accountant) will generally have to be licensed
if they carry on a business of giving financial product advice
as a principal.
Financial
product advice means a recommendation or statement of opinion,
or a report of either of those things, that:
- is intended to influence a person or
persons in making a decision in relation to:
- a particular financial product or
class of financial products; or
- an interest in a particular financial
product or class of financial products; or
- could reasonably be regarded as being
intended to have such an influence.
(See s766B(1); and download a copy of The scope of the licensing
regime: Financial product advice and dealing – An ASIC
guide from our
website)
What exemptions might apply to
me?
Tax
agents
Advice given by
a tax agent registered under the Part VIIA of the
Income Tax Assessment Act
1936 is not financial product
advice, if the advice is:
- given in the ordinary course of
activities as such an agent; and
- reasonably regarded as a necessary part
of those activities.
(See
s766B(5)(c).)
Exempt
services
Regulation 7.1.29 (as
amended by Corporations Amendment Regulations 2003 (No.3) 1
May 2003) outlines certain activities that do not constitute
providing a financial service.
'Eligible service' is defined by the conduct a
person engages in mentioned in s766A(1)(a) to (f) of the
Act.
'Exempt services' are
listed in reg 7.1.29(3) to (5). Should a person's conduct
constitute an exempt service under any of these regulations,
determination is required as to whether the exempt service is
provided in the manner described in reg 7.1.29(1). The scope
of 'exempt service' as it applies to advice relating to
superannuation funds is affected by reg
7.1.29A.
Depending on the
situation, a person who provides an eligible service is taken
not to provide a financial service if their conduct relating
to the exempt service satisfies the elements outlined in reg
7.1.29(1).
In applying reg
7.1.29 the financial service must be an integral and not
merely incidental part of the specified activity. For example,
if relying on the tax advice limb, any financial service must
be part of providing that taxation advice. Financial advice
that is merely incidental to that taxation advice would not
fall within this exemption.
Note that the amended reg 7.1.29 refers to a
'person who provides an eligible service' as defined by the
regulation in comparison to the previous reg 7.1.29 which
referred to 'recognised accountants'. The definition of
"recognised accountants" is outlined in Class Order 02/551
[CO 02/551].
For the purposes of these
FAQs we refer to 'accountants' who qualify as a 'person who
provides an eligible service' as defined by reg
7.1.29.
Other
exemptions
Other
provisions may be relevant to whether an accountant needs an
AFS licence.
For example, a
service is exempt from the licensing provisions where it
consists only of informing a person that a financial services
licensee or a representative of a financial services licensee
is able to provide a particular financial service or class of
financial services. This exemption is conditional on certain
disclosures being made. (See reg 7.6.01(e) and (ea).)
A person is also taken not to
provide financial product advice if they only express an
opinion or recommendation about the allocation of a person's
funds among certain types of product and do not express an
opinion or recommendation as to a specific financial product
or class of financial products. (See reg
7.1.33A.)
What
should I do now?
If you are an
accountant, you will need to consider whether you provide any
services that may require you to hold an AFS licence, or
become the representative of a licensee. You may also need to
seek legal advice about any uncertainties in your particular
situation.
Published
4/6/2002
Revised 24/11/2003,
7/5/2004 |