ASIC Licensing Liaison Warren Day Executive Director Assessment

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ASIC Licensing Liaison Warren Day – Executive Director, Assessment & Intelligence, Regional Commissioner of

ASIC Licensing Liaison Warren Day – Executive Director, Assessment & Intelligence, Regional Commissioner of Victoria March 2019

Agenda 1. Welcome 2. Royal Commission 3. ASIC’s restructure 4. 7. Policy developments: a)

Agenda 1. Welcome 2. Royal Commission 3. ASIC’s restructure 4. 7. Policy developments: a) Government’s Enforcement Taskforce Review b) FFSPs Industry Funding and Regulatory Portal c) Fintech and Regtech 5. Licensing statistics, results, service charter d) 6. Operational developments: Professional Standards for Financial Advisers and the Financial Adviser Register (FAR) a) Licensing refusal decisions 8. Q&A b) Responsible officer probity checks c) Crowd sourced funding Licensing Liaison Meeting 23 November 2020 2

Hayne Royal Commission • Royal Commission recommendations directed at ASIC • ASIC’s extended remit

Hayne Royal Commission • Royal Commission recommendations directed at ASIC • ASIC’s extended remit and strengthened powers and penalties • Royal Commission referrals to ASIC and related enforcement work • 'Why not litigate? ' posture and establishment of an Office of Enforcement • ASIC’s broader strategic change program Licensing Liaison Meeting 23 November 2020 3

Whistleblowing • ASIC values the information we receive from whistleblowers. • Company insiders and

Whistleblowing • ASIC values the information we receive from whistleblowers. • Company insiders and external service providers are may be well-placed to observe and report on misconduct and breaches of the law. • We assess all whistleblower reports we receive and engage with whistleblowers regularly during our inquiries into the concerns. • ASIC’s Office of the Whistleblower ensures ASIC staff record and action whistleblower matters appropriately. • Information about ASIC’s handling of whistleblowers is available from our website, see ASIC Information Sheet 52 Guidance for whistleblowers. ASIC Regulatory Portal 23 November 2020 4

New whistleblower protections – commence 1 July 2019 Broader whistleblower definition • Current and

New whistleblower protections – commence 1 July 2019 Broader whistleblower definition • Current and former employees, officers, and service providers • Spouse and dependants • Anonymous reports Criminal offences and civil penalty provisions • Breaches of confidentiality • Causing detriment (victimisation) Protection for reports about all Commonwealth laws Rights and remedies ASIC Regulatory Portal • Covers reports about misconduct or an improper state of affairs or circumstances • Covers all financial sector laws and other Commonwealth offences • Public interest and emergency disclosures • Easier access to compensation and contractual remedies • Whistleblowers protected from costs orders • Public companies, large proprietary companies, and superannuation trustees required to have a whistleblower policy 23 November 2020 5

ASIC’s recent restructure and refocus • New Commissioners • Executive Directors • Office of

ASIC’s recent restructure and refocus • New Commissioners • Executive Directors • Office of Enforcement • Close continuous monitoring • Corporate governance taskforce Licensing Liaison Meeting 23 November 2020 6

ASIC Industry Funding Model Maria Moore Senior Finance Officer

ASIC Industry Funding Model Maria Moore Senior Finance Officer

Industry funding • Industry funding invoices to recover ASIC's FY 2017 -18 regulatory costs

Industry funding • Industry funding invoices to recover ASIC's FY 2017 -18 regulatory costs ($236. 6 M) issued in January 2019. • Entities that registered can view and pay their invoice online. • Stakeholders who failed to register will receive a hardcopy invoice in the mail. • Invoices were due for payment by 15 March 2019. ASIC Licensing Industry Liaison Roadshow March 2019 8

Penalties and waivers • Failure to submit business activity metrics (criminal offence) • Late

Penalties and waivers • Failure to submit business activity metrics (criminal offence) • Late payment of levies at 20% per annum of the unpaid levy amount • A shortfall penalty if false or misleading statement (including through omission) that results in a smaller levy being paid • ASIC will only waive a levy or penalty in exceptional circumstances (issues beyond the control of entity) • Payment plans for levies and penalties are only available for account balances of $500 or more in cases of financial hardship. ASIC Licensing Industry Liaison Roadshow March 2019 9

IFM: Licence application fees • Low complexity, body corporate, retail clients: $3, 721 •

IFM: Licence application fees • Low complexity, body corporate, retail clients: $3, 721 • High complexity, body corporate, retail clients: $7, 537 • Engage in credit activities: body corporate: $2, 826 • Provide credit: body corporate: $4, 624 Licensing Liaison Meeting • Company auditor registration: $338 • Authorised audit company registration: $3, 429 • SMSF auditor registration: $1, 927 • Liquidator: – application: $2, 247 – registration: $1, 300 23 November 2020 10

Additional IFM information • ASIC industry funding - what you need to know: https:

Additional IFM information • ASIC industry funding - what you need to know: https: //www. youtube. com/watch? v=KRk. Msf. Kk 908 • ASIC industry funding decision tree: https: //download. asic. gov. au/media/4833785/asic-industryfunding-decision-tree. pdf • Check your licence conditions: https: //connectonline. asic. gov. au/ • Business activity metric checklist: https: //download. asic. gov. au/media/4835527/business-activity -metric-checklist-published-2 -august. pdf • 2017 -18 actual levy summary: https: //download. asic. gov. au/media/4954555/asic-industry-fundingsummary-of-2017 -18 -levies-published-december-2018. pdf • General information and subscription for updates: https: //asic. gov. au/industry-funding ASIC Regulatory Portal 23 November 2020 11

ASIC Industry Funding Model Christine Galea Senior Manager, ASIC & RDR Integration

ASIC Industry Funding Model Christine Galea Senior Manager, ASIC & RDR Integration

ASIC Regulatory Portal Launched in July 2018: • Enabled regulated entities to manage Industry

ASIC Regulatory Portal Launched in July 2018: • Enabled regulated entities to manage Industry Funding (IF) information and submit metrics In January 2019: • Launched the billing and invoices feature two additional IF transactions In March 2019: • Launched seven self-managed superannuation fund auditor and two Asia Region Fund Passport transactions ASIC Regulatory Portal 23 November 2020 13

Portal benefits • Smart forms - pre-filled information previously supplied to ASIC • Improved

Portal benefits • Smart forms - pre-filled information previously supplied to ASIC • Improved tracking of applications and transactions • Attach supporting documents • Communicate with us through the portal • Users can connect to many regulated entities. • View and pay invoices ASIC Regulatory Portal 23 November 2020 14

For more information: • https: //regulatoryportal. asic. gov. au/ § Updated information § Frequently

For more information: • https: //regulatoryportal. asic. gov. au/ § Updated information § Frequently Asked Questions § Videos § Quick reference guides ASIC Regulatory Portal 23 November 2020 15

Licensing data • AFSL and ACL 3 year trend line for received (graph 1)

Licensing data • AFSL and ACL 3 year trend line for received (graph 1) and on-hand (graph 2) • 13 month trend line comparing volumes received, on-hand, finalised and KEIs for: • AFSL and ACL 18/19 YTD 150 day KEI performance (graph 8) • Performance at 25%, 50%, 70% and 90% YTD FY 17/18 vs YTD FY 18/19: – AFSL (graph 3) – AFSL (graph 9) – ACL (graph 4) – ACL (graph 10) – Company Auditors (graph 5) – SMSF Auditors (graph 6) • 18/19 YTD pie charter of AFSL, ACL, Auditor activities (graph 7) Licensing Liaison Meeting • New AFSL applications - same authorisation types: – Days to approval (graph 11) – Days to withdrawal (graph 12) 23 November 2020 16

AFS, ACL & Auditor applications received: 3 years Licensing Liaison Meeting 23 November 2020

AFS, ACL & Auditor applications received: 3 years Licensing Liaison Meeting 23 November 2020 17

AFS, ACL & Auditor applications on-hand: 3 years Licensing Liaison Meeting 23 November 2020

AFS, ACL & Auditor applications on-hand: 3 years Licensing Liaison Meeting 23 November 2020 18

AFSL: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 19

AFSL: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 19

ACL: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 20

ACL: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 20

Company Auditors: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020

Company Auditors: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 21

SMSF Auditors: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020

SMSF Auditors: Jan 18 to Jan 19 trend Licensing Liaison Meeting 23 November 2020 22

Snap shot: 18/19 YTD volumes Licensing Liaison Meeting 23 November 2020 23

Snap shot: 18/19 YTD volumes Licensing Liaison Meeting 23 November 2020 23

Performance: % of AFSL and ACL within 150 days Licensing Liaison Meeting 23 November

Performance: % of AFSL and ACL within 150 days Licensing Liaison Meeting 23 November 2020 24

AFSL performance: days taken to reach % decisions Licensing Liaison Meeting 23 November 2020

AFSL performance: days taken to reach % decisions Licensing Liaison Meeting 23 November 2020 25

ACL performance: days taken to reach % decisions Licensing Liaison Meeting 23 November 2020

ACL performance: days taken to reach % decisions Licensing Liaison Meeting 23 November 2020 26

New AFSL applications: e. g. authorisation catergories Authorisation Type Authorisation 1 (take shortest time

New AFSL applications: e. g. authorisation catergories Authorisation Type Authorisation 1 (take shortest time to finalised) Combination of Product and services Advice General Finance DPBASIC Authorisation 2 Deal Apply Deal Underwrite Advice Fin Arrange –Apply / Underwrite / Issue Authorisation 3 Deal Issue – Super Deal Issue – Life Insurance Deal Issue – General Insurance Authorisation 4 Deal Issue – Derivatives Deal Issue – FX Deal Issue – MIS_MDA Deal Issue – MISC_MDA Deal Issue – MIS_IDPS Authorisation 5 (take longest time to Make Market finalised) Scheme Trust Custodial and Depository service Crowd Funding service Licensing Liaison Meeting 23 November 2020 27

New AFSL applications per authorisation categories: days to approval Licensing Liaison Meeting 23 November

New AFSL applications per authorisation categories: days to approval Licensing Liaison Meeting 23 November 2020 28

New AFSL applications per authorisation categories: days to withdrawal Licensing Liaison Meeting 23 November

New AFSL applications per authorisation categories: days to withdrawal Licensing Liaison Meeting 23 November 2020 29

Key Licensing issues • Volume of matters on hand • AFSL KEIs • Withdrawals

Key Licensing issues • Volume of matters on hand • AFSL KEIs • Withdrawals – clear communications to enable decisions to be made earlier • Risk assessment process improvements • More internal stakeholder engagement/buy-in, ownership

Operational and policy developments Peng Lee Senior Manager, Licensing

Operational and policy developments Peng Lee Senior Manager, Licensing

Licensing operational developments • AAT decisions: – Michael Watson (21 Dec 19): not completed

Licensing operational developments • AAT decisions: – Michael Watson (21 Dec 19): not completed relevant training, not provided requested information – Superannuation Warehouse Australia (31 Jan 19): failed to disclose materially relevant information – Chalhoub Nominees (4 Feb 19): Inadequate insurance, not completed relevant training, not satisfied would provide financial services efficiently, honestly and fairly • Responsible officer probity checks and other required information • Crowd sourced funding Licensing Liaison Meeting 23 November 2020 32

Licensing policy developments • Government’s Enforcement Taskforce Review (50 recommendations): – Penalties (increased or

Licensing policy developments • Government’s Enforcement Taskforce Review (50 recommendations): – Penalties (increased or new penalties) – Licensing powers (7 recommendations) • Foreign Financial Service Providers (CP 301) • Fintech and Regtech including a tender for a Licensing Technology Assisted Guidance Tool (for further information email: tenders@asic. gov. au). Licensing Liaison Meeting 23 November 2020 33

ASIC’s Innovation Hub • 71 new licences granted • 18 licence variations granted •

ASIC’s Innovation Hub • 71 new licences granted • 18 licence variations granted • Main areas of engagement: • CSEF (8%) • Payments (13%) • Digital advice (14%) • Marketplace lending (11%) ASIC Regulatory Portal 23 November 2020 34

Financial Advisers Nicole Chew, Senior Lawyer Anna Dawson, Senior Policy Lawyer

Financial Advisers Nicole Chew, Senior Lawyer Anna Dawson, Senior Policy Lawyer

New Financial Adviser standards Information licensees need to give to ASIC When ASIC needs

New Financial Adviser standards Information licensees need to give to ASIC When ASIC needs to be notified Details about provisional financial advisers who are authorised between 15 November 2019 – 31 December 2019 1 January 2019 and 14 November 2019 Licensee’s CPD year start date (and any changes to that date) 15 November 2019 – 31 December 2019 Principal place of business, email address (not public) and compliance scheme cover for the financial adviser In the first notice lodged between 15 November 2019 – 31 December 2019 Details of any failure(s) to meet the CPD requirements From 15 November 2019 Date that an existing adviser has passed the exam 15 November 2019 – before 1 January 2021 Date that an existing adviser has met the education requirement 15 November 2019 – before 1 January 2024 Licensing Liaison Meeting 18 & 20 March 2019 36

Questions?

Questions?