ABA submission to ASIC on Future of Financial Advice: Conflicted remuneration

The ABA supports the proposed amendments being considered by Parliament expeditiously to give industry ample time to implement changes to comply with the reforms. As such the ABA strongly supports the proposed bill being finalised and introduced into Parliament as soon as practicable.

However, the ABA also asks Treasury to consider making a number of further amendments and clarifying a small number of matters in the Bill. Doing so would enhance the effectiveness and benefit of the Bill for industry.

The ABA supports recently enacted legislative changes to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) that require reporting entities to verify their customers’ identity before providing designated services.

The ABA also supports the provision for special circumstances that justify carrying out applicable customer identification procedures (ACIP) after the commencement of a designated service. While generally in support of this Chapter, the ABA seeks additional clarity over the scope of the proposed special circumstances, particularly in relation to opening an account and the initial deposit.

We also support broader changes proposed to Chapters 21 and 48 of the rules. The submission puts forward a proposal regarding Chapter 80 on the basis that there may be unintended consequences with the current drafting, such as exempting a broader range of activities.

Electronic signatures can mitigate fraud risk by implementing multi-layers and factors of security and authentication, and the technology can generate an auditable electronic record, tamper proof seal, and use multiple ways to authenticate the signatory’s identity.

Most mortgages are not created pursuant to deeds. As such consideration of reforms in Western Australia should distinguish between the reforms that are necessary to enable electronic mortgages including the counterpart mortgage, and the reforms that need to be made to enable electronic deeds.

The ABA strongly supports reforms to enable electronic deeds and not requiring most types of deeds to be witnessed.