Advisers receive guidance on rights under FSCPBY JAMIE WILLIAMSON | THURSDAY, 4 AUG 2022 11:56AM
Read more: ASIC, Administrative Appeals Tribunal, Australian Financial Complaints Authority
ASIC has released guidance regarding the function of the Financial Services and Credit Panel, outlining the actions it may take and the rights of financial advisers who are subject to a hearing or disciplinary measure.
In December, ASIC outlined the operations of the FSCP and what powers it has been afforded. In an update, ASIC has now provided further detail as to what instances may lead to a panel being convened.
Situations in which ASIC must convene a panel include matters of insolvency, fraud, failure to approve a Statement of Advice, contraventions of financial services law, and refusal or failure to give effect to an Australian Financial Complaints Authority determination at least twice.
However, the regulator also explained that it may choose to convene a panel after determining what regulatory benefit would be derived from doing so; "For example, we will consider whether misconduct is widespread or part of a growing trend, and whether referring the matter to a sitting panel will send an effective and deterrent message to industry."
ASIC said it will maintain full discretion over what is investigated and while it will carefully consider reports of misconduct it receives, it will be selective about which it chooses to pursue to ensure its resources are being used most efficiently.
Hearings will generally be private, unless the adviser requests otherwise, and will typically be held virtually.
There is no burden of proof on an adviser in a hearing situation, the guidance outlines, and the rules of evidence that apply in a court of law do not apply at a FSCP hearing.
"A hearing by a sitting panel is an inquiry to determine the facts and help the panel determine what, if any, action it should take against a financial adviser based on those facts. The hearings are 'inquisitorial' in nature, rather than adversarial-that is, they serve as an inquiry to ascertain the relevant facts," the guidance reads.
The guidance also provides detail on financial advisers' rights when they are called to front a panel, including the right to be represented by a barrister or solicitor of the Supreme Court of a state or territory or of the High Court at a hearing. The adviser may also have, if allowed by the chair of the convened panel, a friend or relative present for support.
In an additional Information Sheet, ASIC further clarified the rights of advisers, including that they may discuss any panel's decision with the chair of the sitting panel. Advisers can also apply to ASIC to have a decision varied or revoked where the decision directed the adviser to undertake further training, supervision, counselling, reporting, or where an order suspending or cancelling their registration has been made.
"ASIC will determine whether to convene another sitting panel to consider your application. Various matters may be relevant to ASIC's decision whether to convene a sitting panel, such as whether there has been a change in the circumstances that led to a sitting panel giving the direction or order to the financial adviser," it says.
In some circumstances, a decision handed down by an FSCP panel can be reviewed by the Administrative Appeals Tribunal, but not all.
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