Service delivery during the COVID-19 pandemic

During this time,  all Know Compliance staff and management are working from their individual homes to comply with the social distancing measures.   Each home workplace is equipped with a telephone, computer (PC and/or laptop), appropriate seating and is isolated from other home activities.  Each home computer is password protected All have access to the[…]

All clients beware

Significant increase penalties for misleading statements in licence applications. Pursuant to Section 1308(8) of the Corporations Act a person must not, in connection with an application for an Australian financial services licence: make a statement that is false or misleading in a material particular knowing it to be false or misleading; omit to state any[…]

AFS Licensees – Why You Must Maintain Adequate Financial Resources

Australian Financial Services Licensees must comply with Section 912A(1)(d) Corporations Act – Financial Resources Requirements Holders of Australian financial services (AFS) licences must have sufficient financial resources at all times to provide their licensed financial services and to be able to carry out operational and regulatory compliance checking, monitoring and reporting. Section 912A(1)(d) states that[…]

Compliance Committee Meetings

Effective Minute Taking Effective and accurate minute taking is an important part of any Compliance Meeting. The regulator is likely request copies of compliance committee minutes when auditing a company or investigating a particular breach. Therefore the minutes should be prepared not as a personal record but as an accurate description of the issues discussed[…]

Whistleblower laws come into effect

New national Whistleblower laws came into effect from 1 July 2019. All public companies and large proprietary companies have until 1 January 2020 to put into place a written policy with respect to the protection of whistleblowers. A penalty of up to $12,600 may be applied for non-compliance. A large proprietary company is characterised by[…]

Unconscionable Conduct

An allegation of unconscionable conduct in business dealings arises when a party to a contract says or does something that is so unreasonable that it defies good conscience. The Courts will intervene and potentially set aside a contract if at the time the contract was entered into there ought to have been matters “preying on[…]

General or Personal Advice?

On 28 October 2019, the full Federal Court, in the matter of ASIC v Westpac Securities (2019) FCAFC 187 handed down an important decision regarding the distinction between personal and general advice. Background In 2014 and 2015, Westpac engaged in a telephone campaign to encourage existing customers to roll-over their existing external superannuation into accounts[…]

Conflicts of Interest Management

The successful management of conflict of interests is a crucial part of any organisation. Conflicts of interest can arise between employees and their employers and representatives, and between an organisation and its customers. Conflicts of interest can arise even though there is no financial loss and regardless of the motivations of the people and companies[…]

Legal Professional Privilege

Pursuant to the ASIC Act, ASIC has the ability to demand the production of documents in the following circumstances: in the performance of ASIC’s functions generally; to ensure compliance with the Corporations legislation; in relation to an alleged or suspected contravention of the law; and for the purpose of a formal investigation. The notice will[…]

General Advice: It’s Getting Personal

Under the Corporations Act 2001, financial product advice is classified as either “general advice” and “personal advice”.1  Personal advice is financial product advice that is given or directed to a person (including by electronic means) in circumstances where: The provider of the advice has considered one or more of the person’s objectives, financial situation and[…]

Industry Funding Model for ASIC

The Government has confirmed that it will introduce an industry funding (user pays) model for ASIC through a cost recovery levy, commencing 1 July 2017. What does this mean for licence holders? That there will be increased costs is definite, unless one decides to give up one’s licence. Many AFS Licensees hold authorisations on their[…]


There is no definition of a responsible manager in the Corporations Act. It is a term developed by ASIC. In ASIC Regulatory Guide 105 the term responsible manager is used to label the person nominated by a licence applicant for the purposes of meeting ASIC’s competencies for licensing. As noted in the Regulatory Guide the[…]

ASIC’S Wish List for Standards of Behaviour

ASIC has issued a list of conduct and disclosure practices that it would like to see be adopted by participants within the sectors it regulates. For the financial services sector this list includes:  acting professionally at all times  avoiding or properly managing conflicts of interest  treating investors fairly  ensuring that disclosure[…]


Recent Court decisions have confirmed that pursuant to Section 79 of the Corporations Act, ANY employee of a corporation (not just directors), can be liable for contraventions of the Act, if they have KNOWLEDGE of a contravention. Section 79 provides: CORPORATIONS ACT 2001 – SECT 79 Involvement in contraventions A person is involved in a[…]

Accountant’s exemption removed – what next?

The accountants’ licensing exemption (Regulation 7.1.29A) previously permitted a recognised accountant to recommend the establishment or winding-up of an interest in a SMSF without holding an Australian Financial Services (AFS) licence. This exemption was removed on 1 July 2016. ASIC has advised that as at 2 July it had issued 317 Limited AFS licenses to[…]


ASIC has expressed strong concerns that Australian Financial Services licensees have not been reporting correctly, or have been waiting too long to report, breaches or potential breaches and have therefore been in contravention of section 912D of the Corporations Act. ASIC has warned licensees that failing to report a significant breach could constitute a criminal[…]


As of 1 July 2014, AFS licensees that are authorised to provide custodial or depository services have had to meet the new net tangible asset (NTA) requirements set out in ASIC class order [CO 13/761]. This is regardless of whether they actually provide such services. However, there appears to be some misconception that licensees only[…]

Accountants and Limited AFSLs – making the right decision before time runs out

The accountants’ licensing exemption (Regulation 7.1.29A) currently permits a recognised accountant to recommend the establishment or winding up of an interest in a SMSF without holding an Australian Financial Services (AFS) licence. From 1 July 2016 the accountants’ exemption will be removed. This means that if you wish to continue to provide this advice to[…]

ASIC Regulatory Guides 133 and 166 and implications for Responsible Entities with third party custodians

We recommend that all Responsible Entities (REs) which use external custodians consider whether changes are required to the compliance plans of their registered managed investment schemes in the light of changes to the custodial requirements. This resulted from ASIC class orders [CO 13/761] and [CO 13/1409] which are explained in ASIC Regulatory Guides RG 133[…]

What is a good compliance culture?

Be warned that ASIC’s strategic plan for 2014-15 will focus on financial advisers and responsible entities operating managed investment schemes. If you are licensed to give financial advice or operate a managed investment scheme, you may be surprised by a surveillance visit from ASIC. Usually, the main aim of an ASIC surveillance visit is to[…]


AML CTF COMPLIANCE Changes to the Anti-Money Laundering and Counter Terrorism Financing Rules Instrument 2007 (No.1) (AML Rules) became effective on 1 June 2014. and introduced new customer due diligence requirements, together with deadlines for complying with these new rules. 1 June 2014 – new customer due diligence requirements Key obligations under the new requirements[…]

ASIC update August 2014

Below are notes taken from a meeting at which time ASIC provided information on its activities in assessing participants in the financial services industry. These notes may be of interest to property and mortgage fund managers, platform operators and other holders of Australian financial services licences. 1. During the 2013/14 financial year, ASIC targeted 10[…]

Stockbrokers Financial Requirements – ASX Market Integrity Rules and ASIC Requirements

Key Financial Obligations of Market Participants of Security Exchanges, including the Australian Securities Exchange (ASX) Market Participants are required to comply with either the financial requirements of the ASIC Market Integrity Rules or with the ASX’s financial requirements, if they are ASX clearing participants. In either case, similar requirements apply. Two of the areas of[…]