ASIC Corporations (Adara Advisors) Instrument 2015/628

Administered by Department of the Treasury

Legislation au F2015L01255 Not in force Legislative Instrument

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EXPLANATORY STATEMENT for
ASIC Corporations (Adara Advisors) Instrument 2015/628

Prepared by the Australian Securities and Investments Commission

Corporations Act 2001

The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations (Adara Advisors) Instrument 2015/628 under section 926A of the Corporations Act 2001 (the Act). Subsection 926A(2)(a) provides that ASIC may exempt a person or class of persons from provisions to which section 926A applies, and subsection 926A(3) provides that an exemption may be subject to specified conditions.

Background

Adara Advisors Pty Ltd ACN 119 655 499 (Adara Advisors), an Australian financial services licensee (licensee), has a business which relies on prominent members (Panel Members) of the financial services industry to work on corporate advisory matters on a pro bono basis for Adara Partners Pty Limited ACN 601 898 006 (Adara Partners). Adara Partners is an authorised representative of Adara Advisors. The fees generated from services rendered to wholesale clients of Adara Partners are donated to an international development organisation.

Adara Advisors applied for relief from ASIC, requesting that ASIC exercise its powers under subsection 926A(2) of the Act and modify subsection 911B(1) so that Panel Members, acting as authorised representatives of Adara Advisors, may provide financial services to wholesale clients of Adara Partners, without also needing to be appointed as authorised representatives of another licensee (Panel Member Firm) on whose behalf the Panel Member, as an employee or director, provides financial services.

Operation of relevant sections of the Act

Under paragraph 911B(1)(a), Panel Members, may, in the course of their regular occupation, qualify as providers of financial services on behalf of a licensee (or a person who is otherwise exempt from having to hold an Australian financial services licence under section 911A(2)), in the capacity of an employee or director of the licensee. Should such a Panel Member be nominated as an authorised representative of Adara Advisors, subparagraph 911B(1)(b)(iv) would require that the Panel Member also be appointed as an authorised representative of their respective Panel Member Firm. Adara Advisors sought relief from this requirement.

ASIC Instrument 15/0474

ASIC granted relief on a conditional basis to nine individual Panel Members through ASIC Instrument 15/0474, which was executed on 29 May 2015.

In granting the relief, ASIC considered the regulatory burden of requiring compliance with subparagraph 911B(1)(b)(iv) outweighed the net regulatory benefit. It is further noted that Adara Partners is only authorised to provide financial services to wholesale clients and that those clients are protected by section 917C of the Act, which governs liability where a person is providing financial services on behalf of more than one licensee. Certain safeguards were included in the ASIC Instrument 15/0474, including those relating to the management of conflicts of interest, and disclosure requirements.

2. Purpose of the instrument

Relief under ASIC Instrument 15/0474 was previously granted but restricted to nine specified individuals nominated by Adara Advisors, as a temporary measure to facilitate the launch date of Adara Partners. The purpose of this instrument is to extend the same relief provided in ASIC Instrument 15/0474 to any Panel Members appointed in the future. An instrument providing this relief is necessarily legislative as subsection 926A(3) provides that "[a]n exemption … is a legislative instrument if the exemption … is expressed to apply in relation to a class of persons … (whether or not it is also expressed to apply in relation to one or more persons … otherwise than by reference to membership of a class)".

3. Operation of this instrument

This instrument grants an exemption to Panel Members so they can provide financial services on behalf of Adara Advisors as authorised representatives without also being an authorised representative of the Panel Member Firm as would otherwise be required under subsection 911B(1) of the Act. The exemption applies where:

(a) Adara Advisors holds an Australian financial services licence covering the provision of the relevant financial services; and

(b) the Panel Member is an authorised representative of Adara Advisors; and

(d) the Panel Member is an employee or director of a Panel Member Firm who carries on a financial services business; and

(e) the Panel Member provides financial services in this jurisdiction on behalf of the Panel Member Firm; and

(f) the Panel Member, in their capacity as authorised representative of Adara Advisors, only provides financial services to wholesale clients of Adara Partners; and

(g) Adara Partners is an authorised representative of Adara Advisors; and

(h) Adara Advisors has received from the Panel Member written confirmation that they have received the consent of the Panel Member Firm to the Panel Member being appointed as an authorised representative of Adara Advisors; and

(i) Adara Advisors has a written undertaking from the Panel Member:

(i) to manage conflicts of interest arising from acting as an authorised representative of Adara Advisors and as an employee or director of the Panel Member Firm; and

(ii) not to use confidential information obtained in the course of acting as an authorised representative of Adara Advisors when acting as an employee or director of the Panel Member Firm; and

(iii) not to use confidential information obtained in the course of acting as an employee or director of the Panel Member Firm, when acting as an authorised representative of Adara Advisors; and

(iv) not to receive any financial benefit as a result of providing financial services to wholesale clients of Adara Partners; and

(j) Adara Advisors has received from the Panel Member written confirmation that the Panel Member Firm has confirmed that there is no conflict of interest for the Panel Member Firm in the Panel Member providing the relevant financial services to wholesale clients of Adara Partners; and

(k) before providing financial services to a wholesale client of Adara Partners, the Panel Member has disclosed to that client in writing that they are:

(i) an authorised representative of Adara Advisors; and

(ii) an employee or director of the Panel Member Firm which holds an Australian financial services licence, which they must identify; and

(iii) relying on an exemption granted by ASIC enabling them to provide financial services on behalf of Adara Advisors as its authorised representative, without also being an authorised representative of the Panel Member Firm as would otherwise be required by the Act; and

(iv) providing the financial services only as an authorised representative of Adara Advisors; and

(l) the Panel Member Firm does not receive any financial benefit as a result of the Panel Member providing the relevant financial services.

4. Consultation

In drafting and executing this relief, ASIC has consulted Adara Advisors and its legal representatives. ASIC believes this instrument is minor and machinery, and does not have a regulatory impact apart from the discrete class of persons to which it applies, namely, Panel Members, Panel Member Firms, and wholesale clients of Adara Partners. Relief of this kind normally would not necessitate the issue of a legislative instrument.

The Office of Best Practice Regulation has confirmed that a Regulation Impact Statement is not necessary for this legislative instrument.

Overview

The Corporations Act 2001, enacted by the Parliament of Australia, aims to provide a framework for financial markets and entities, ensuring transparency, investor protection, and overall integrity in corporate activities. The ASIC Corporations (Adara Advisors) Instrument 2015/628, issued under section 926A of the Act, was introduced to address a specific gap in regulatory requirements concerning authorised representatives of financial services licensees. Adara Advisors, an Australian financial services licensee, sought relief from the requirement that prominent industry members (Panel Members) providing pro bono advisory services must also be appointed as authorised representatives of another licensee on whose behalf they provide financial services. The policy objective of this instrument is to facilitate the efficient operation of Adara Advisors and its subsidiary, Adara Partners, by exempting Panel Members from this dual authorisation requirement, while ensuring that appropriate safeguards are in place to manage conflicts of interest and protect wholesale clients.

Scope and Application

The ASIC Corporations (Adara Advisors) Instrument 2015/628 applies to a specific class of persons, namely Panel Members who are employees or directors of Panel Member Firms and who provide financial services to wholesale clients of Adara Partners on behalf of Adara Advisors, an Australian financial services licensee. This legislative instrument was issued under section 926A of the Corporations Act 2001, which empowers the Australian Securities and Investments Commission (ASIC) to exempt certain individuals or classes of individuals from particular provisions of the Act, subject to specified conditions. The exemption granted by this instrument allows Panel Members to act as authorised representatives of Adara Advisors without also needing to be authorised representatives of the Panel Member Firm, provided certain conditions are met, including obtaining written consent from the Panel Member Firm, managing conflicts of interest, and adhering to disclosure requirements. The exemption is designed to reduce regulatory burden while maintaining necessary safeguards for wholesale clients. The instrument operates on a national level, and it extends the relief initially granted under ASIC Instrument 15/0474 to include any future Panel Members appointed by Adara Advisors.

Key Provisions

The ASIC Corporations (Adara Advisors) Instrument 2015/628 modifies the Corporations Act 2001 (the Act) to provide certain exemptions to Panel Members, who are prominent members of the financial services industry working pro bono for Adara Advisors. Under section 911B(1) of the Act, these Panel Members are typically required to also be appointed as authorised representatives of another licensee (Panel Member Firm) on whose behalf they provide financial services. However, the Instrument allows these Panel Members to provide financial services to wholesale clients of Adara Partners, which is an authorised representative of Adara Advisors, without needing to be appointed as an authorised representative of the Panel Member Firm (subsection 911B(1)(b)(iv)). This exemption applies under certain conditions (subsection 926A(3)). The Instrument imposes several obligations on the parties involved. Adara Advisors must ensure that the Panel Members are employees or directors of a Panel Member Firm, and that they are providing financial services in the jurisdiction on behalf of the Panel Member Firm. The Panel Members must provide Adara Advisors with written confirmation of their consent to be appointed as an authorised representative of Adara Advisors, and must also provide a written undertaking to manage conflicts of interest, not to use confidential information obtained in their roles, and not to receive any financial benefit from providing services to wholesale clients of Adara Partners. Additionally, Adara Advisors must ensure that the Panel Members disclose in writing to clients that they are an authorised representative of Adara Advisors, an employee or director of a Panel Member Firm, and that they are providing services under an ASIC exemption. Breach of the conditions imposed by this Instrument may result in civil or criminal consequences. Under the Corporations Act 2001, breaches of financial services laws can result in penalties such as fines and imprisonment. For example, under section 1307 of the Act, a person who contravenes a civil penalty provision can be fined up to $202,000 for a corporation and up to $40,400 for an individual, depending on the seriousness of the offence. Additionally, under section 1316 of the Act, a person who is found guilty of an offence against the Act can be imprisoned for up to five years. The Instrument itself does not specify maximum penalties for breach of its conditions, but the underlying Act provides a framework for penalties that can be applied. In summary, the ASIC Corporations (Adara Advisors) Instrument 2015/628 provides exemptions to Panel Members under specific conditions, imposes obligations on Adara Advisors and the Panel Members to manage conflicts of interest and ensure proper disclosure to clients, and leaves the potential for civil or criminal penalties under the Corporations Act 2001 for any breach of the Instrument's conditions.

Area of Law: Corporate Law & Governance; Financial Services Regulation
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Licensing & Registration; Compliance Obligations; Conflict of Laws

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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