Thomson Reuters and Maddocks have been tracking the progress of the limited Australian financial services (AFS) licence for accountants. There have now been two important developments:
These developments are important for accountants who currently rely on specific exemptions available under financial services laws from the need to hold an AFS licence. The exemption which we expect is most commonly relied on by many accountants, allowing them to advise clients about acquiring or disposing of an interest in a SMSF, will not be available after 1 July 2016.
If an accountant or accounting firm considers that advising on SMSFs:
then those accountants or firms should seriously consider their strategy for meeting client needs beyond 1 July 2016.
ASIC's guidance provides good reason for accountants to bring forward those considerations. During the transitional period from 1 July 2013 to 30 June 2016, the licensing application process for 'recognised accountants' will be simplified by the need to demonstrate only 'knowledge' (which can be demonstrated by holding certain qualifications) rather than knowledge and experience.
You can read more about ASIC's transitional arrangements in a separate ClearLaw article.
The Corporations Amendment Regulation 2013 (No 3) (Cth) was registered on 4 June 2013. It amends the Corporations Regulations 2001 (Cth) to create a new limited licensing regime from 1 July 2013 which allows accountants (and others) to provide a broader range of financial product advice than currently allowed for under the existing accountants' exemption.
The amendments remove the current exemption which allows accountants to provide financial advice on self-managed superannuation funds (SMSFs) without an AFS licence from 1 July 2016 and provides alternative licensing arrangements from 1 July 2013. This will provide a 3-year transition period for accountants utilising the existing exemption to transition to the new regime.
Specifically, the amendments to the Corporations Regulations:
A "limited licensee" is defined as a financial services licensee that:
New regulation 7.6.04(1)(k) provides ASIC with the ability to conduct a knowledge review of a limited licensee who has taken advantage of the streamlining arrangements. ASIC will also use its existing criteria for making assessments of training and education competency set out in its regulatory guides such as Regulatory Guide 146 Licensing: Training of financial product advisers and Regulatory Guide 105 Licensing: Organisational competence.
For more information, contact Maddocks on (03) 9288 0555 and ask to speak to a member of the Commercial team.
You can read earlier Clearlaw articles concerning companies here.
 A 'recognised accountant' is a person who: holds a Certificate of Public Practice issued by the Institute of Chartered Accountants; or holds a Public Practice Certificate issued by CPA Australia Ltd or the Institute of Public Accountants.
Leigh is a partner in the Maddocks Tax & Revenue team.
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His advice covers both direct and indirect tax considerations.
Leigh advises Australian and multinational companies, high net worth individuals, accountants and financial advisers on all areas of taxation law.
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For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.