ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792
About this compilation
Compilation No. 2
This is a compilation of ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792 as in force on 11 February 2022. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
Contents
Part 1—Preliminary
1 Name of legislative instrument
3 Authority
4 Definitions
Part 2—Exemption
5 Licensing relief for financial counselling agencies
Endnotes
Endnote 1—Instrument history
Endnote 2—Amendment history
Part 1—Preliminary
1 Name of legislative instrument
This is the ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792.
3 Authority
This instrument is made under paragraph 926A(2)(a) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
client means a person who receives a financial service from a financial counselling agency.
financial counselling agency means a person that provides a financial counselling service.
financial counselling association means each of the following:
(a) Financial Counselling Australia Ltd;
(b) Financial Counselling Victoria Inc.;
(c) Financial Counsellors Association of New South Wales Inc;
(d) Financial Counsellors Association of Western Australia Inc;
(e) Financial Counsellors Association of Queensland Inc.;
(f) The South Australian Financial Counsellors’ Association Incorporated;
(g) Financial Counselling Tasmania Inc.;
(h) Financial Counsellors ACT.
financial counselling service means a counselling and advocacy service provided predominantly for the purposes of assisting individuals or small businesses who are in financial difficulty to resolve their problems.
small business means a business with less than 100 employees.
Part 2—Exemption
5 Licensing relief for financial counselling agencies
Exemption
(1) A financial counselling agency does not have to comply with subsection 911A(1) of the Act for the provision of the following financial services to a client:
(a) financial product advice in relation to any of the following:
(i) a deposit product;
(ii) a facility for making non-cash payments within the meaning of subsection 763D(1) of the Act;
(iii) an insurance product;
(iv) an RSA product;
(v) a superannuation product;
(b) financial product advice to the effect that the client should or may dispose of any of the following:
(i) a security;
(ii) a financial product referred to in paragraph 764A(1)(b) or (ba) of the Act;
(iii) a debenture, stock or bond issued by a government.
Note: ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115 provides relief from subsections 911A(1) and 911B(1) of the Act to a person who provides financial services on behalf of a person who does not need an Australian financial services licence because of an exemption under section 926A of the Act.
Where the exemption applies
(2) The exemption in subsection (1) applies where all of the following are satisfied:
(a) the financial service is provided as part of a financial counselling service;
(b) no fees or charges (however described) are payable by or on behalf of the client in relation to the financial service or any other aspect of the financial counselling service, other than any fees or charges payable on behalf of the client by the Commonwealth, a State or a Territory;
(c) no remuneration (whether by way of commission or otherwise) is payable to, or for the benefit of, the financial counselling agency, its representatives or associates by any person in relation to any action by or on behalf of the client arising from either the financial service or any other aspect of the financial counselling service;
(d) the financial counselling agency takes all reasonable steps to ensure that each person who provides the financial services on its behalf:
(i) is a member of, or is eligible to be a member of, a financial counselling association; and
(ii) has undertaken appropriate training to ensure that they have adequate skills and knowledge to satisfactorily provide the financial services and any other aspect of the financial counselling service;
(e) the financial counselling agency:
(i) does not carry on or otherwise participate in a financial services business which involves the provision of a financial service, other than a financial service (exempt financial service) that is:
(A) a financial service referred to in subsection (1) and in relation to which paragraphs (2)(a) to (d) are satisfied; or
(B) a claims handling and settling service; and
(ii) takes all reasonable steps to ensure that none of its representatives provide or participate in the provision of a financial service, other than an exempt financial service.
Endnotes
Endnote 1—Instrument history
Instrument number | Date of FRL registration | Date of commencement | Application, saving or transitional provisions |
2017/792 | 22/9/2017 (see F2017L01244) | 26/9/2017 | |
2020/635 | 14/8/2020 (see F2020L01020) | 15/8/2020 | - |
2022/20 | 10/2/2022 (see F2022L00126) | 11/2/2022 | - |
Endnote 2—Amendment history
ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected | How affected |
Section 2 | rep. s48D LA |
Section 4 | am. 2020/635 and 2022/20 |
Overview
The ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792 was enacted to provide certain financial counselling agencies with relief from specific licensing requirements under the Corporations Act 2001. This legislative instrument aims to facilitate the provision of essential financial counselling services by exempting certain agencies from needing an Australian financial services licence for particular financial services, provided that certain conditions are met. The instrument was made under the authority of paragraph 926A(2)(a) of the Corporations Act 2001 by the Australian Securities and Investments Commission (ASIC). The primary policy objective is to ensure that financial counselling agencies can effectively assist individuals and small businesses in financial difficulty without being unduly burdened by licensing requirements, as long as they adhere to the specified conditions for exemption.
The instrument outlines the criteria under which a financial counselling agency can be exempt from needing a licence for certain financial services, such as providing advice on deposit products, non-cash payment facilities, insurance products, RSA products, and superannuation products, as well as advice on disposing of certain securities and financial products. The exemption applies when the financial services are provided as part of a financial counselling service, no fees or charges are payable by or on behalf of the client, no remuneration is payable to the financial counselling agency or its associates, and appropriate qualifications and training are ensured for the service providers. Additionally, the financial counselling agency must not engage in other financial services businesses outside of the exempted services and must take reasonable steps to ensure compliance with these conditions.
Scope and Application
The ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792 applies to financial counselling agencies within Australia, offering exemptions from certain licensing requirements under the Corporations Act 2001 for specific financial services provided as part of financial counselling services. This exemption is applicable to financial counselling agencies that meet the defined conditions, such as providing no fee-based services, ensuring that financial service providers are members of a financial counselling association and have undergone appropriate training, and refraining from engaging in financial services businesses outside the scope of the exemption. The instrument was made under the authority of the Corporations Act 2001 and its applicability extends nationwide, covering all states and territories. Notably, this instrument also references subordinate instruments that provide additional relief, such as ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115, which offers further exemptions under specific conditions. The exemptions and their conditions are subject to change with amendments as evidenced by the amendment history detailed in the endnotes.
Key Provisions
The ASIC Corporations (Financial Counselling Agencies) Instrument 2017/792 (the Instrument) exempts certain financial counselling agencies from the requirement to hold an Australian financial services licence under the Corporations Act 2001 (the Act) for specified financial services (section 5). The key operative sections of the Instrument are section 1, which names the legislative instrument, section 3, which specifies the authority under which the instrument is made, and section 4, which defines key terms used in the Instrument. The exemptions for financial counselling agencies are set out in section 5.
The obligations and requirements imposed by the Instrument on financial counselling agencies include providing financial counselling services as part of a counselling and advocacy service to assist individuals or small businesses in financial difficulty (section 5(1)(a)). Additionally, financial counselling agencies must ensure that no fees or charges are payable by or on behalf of the client in relation to the financial service or any other aspect of the financial counselling service, except for any fees or charges payable on behalf of the client by the Commonwealth, a State or a Territory (section 5(2)(b)). Furthermore, the agency must not receive any remuneration from any person in relation to any action by or on behalf of the client arising from either the financial service or any other aspect of the financial counselling service (section 5(2)(c)). It must also ensure that each person who provides the financial services on its behalf is a member of, or is eligible to be a member of, a financial counselling association and has undertaken appropriate training to ensure they have adequate skills and knowledge to provide the financial services (section 5(2)(d)(i) and (ii)). The agency must not carry on or otherwise participate in a financial services business which involves the provision of a financial service, other than an exempt financial service, and must take all reasonable steps to ensure that none of its representatives provide or participate in the provision of a financial service, other than an exempt financial service (section 5(2)(e)).
The Instrument does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, breaches of the Act or any other relevant legislation by financial counselling agencies may result in civil or criminal penalties, as provided under the Act or other relevant legislation. The penalties for breaches of the Act can include fines and/or imprisonment, depending on the nature and severity of the breach. For example, under section 1311 of the Act, a person who contravenes a civil penalty provision can be fined up to the greater of $210,000, three times the benefit obtained from the contravention, or 30% of the person's annual turnover if the person is a body corporate. In the case of serious or repeated contraventions, the fine can be up to the greater of $2,100,000, three times the benefit obtained from the contravention, or 100 times the applicable unit amount. Additionally, under section 1317 of the Act, a person who engages in conduct that is fraudulent, involves a breach of trust, or is otherwise dishonest can be fined up to the greater of $210,000, three times the benefit obtained from the contravention, or 30% of the person's annual turnover if the person is a body corporate, and/or imprisoned for up to five years. For serious or repeated contraventions, the fine can be up to the greater of $2,100,000, three times the benefit obtained from the contravention, or 100 times the applicable unit amount, and/or imprisonment for up to 10 years.