Overview

The Corporations Amendment (Registration of Relevant Providers) Regulations 2022 were enacted to address a specific gap identified in the financial services sector, following the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021. The primary issue was the need for a central registration requirement for financial advisers, in line with the Royal Commission's recommendations. The Regulations amend the Corporations Regulations 2001 to delay the initial registration of financial advisers on the Financial Advisers Register by six months, to 1 July 2023. This delay is intended to allow for improvements to the registration process, benefiting both licensees and financial advisers. The enacting body is the Parliament of Australia, and the policy objective is to enhance the regulatory framework for financial services by ensuring a smoother implementation of the new registration requirements.

Scope and Application

The Corporations Amendment (Registration of Relevant Providers) Regulations 2022 amends the Corporations Regulations 2001 to extend the deadline for financial services licensees to register their financial advisers on the Financial Advisers Register (FAR). This delay, effective from 1 July 2023, provides additional time to refine and improve the registration process, as mandated by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021. The Regulations are made under the authority of the Corporations Act 2001, which governs corporations and financial services in Australia. The scope of the Act applies to financial services licensees and their financial advisers, specifically targeting the conduct and transactions related to financial advice. These Regulations do not specify any particular exclusions or exemptions and apply nationwide across Australia. The amendments are considered minor and do not necessitate a Regulatory Impact Statement, reflecting their limited regulatory impact.

Key Provisions

The Corporations Amendment (Registration of Relevant Providers) Regulations 2022 (the Regulations) introduces changes to the Corporations Regulations 2001, primarily by extending the deadline for financial services licensees to register their financial advisers on the Financial Advisers Register (FAR). Under Section 4, the Regulations amend regulation 7.6.07C to omit Subdivision A of Division 8C of the Act, thereby altering the date financial advisers must be registered. The amendment, detailed in Item 1 of Schedule 1, specifies that registration on the FAR will now be required by 1 July 2023, rather than the originally intended date. The Regulations are made under the authority of the Corporations Act 2001 (Section 3), and they come into effect the day after registration on the Federal Register of Legislation (Section 2). These Regulations impose specific obligations on financial services licensees, requiring them to ensure that their financial advisers are registered on the FAR by the new deadline of 1 July 2023. The extended period provides additional time for licensees to prepare for and complete the registration process, which is expected to enhance the efficiency and effectiveness of the FAR. Additionally, the changes are intended to benefit both licensees and financial advisers by allowing for improvements in the registration process itself. The delay is designed to accommodate necessary amendments and improvements, ensuring that the registration process operates smoothly and meets the intended objectives. Any failure to comply with the registration requirements within the stipulated timeframe can lead to significant consequences. Although the Regulations themselves do not specify penalties for non-compliance, the underlying Corporations Act 2001 (the Act) provides for various civil and criminal penalties for breaches of corporate and financial regulations. For example, individuals and corporations found in breach of the Act may face fines and imprisonment, with penalties varying depending on the severity and nature of the offence. The Act also allows for the imposition of pecuniary penalties, where financial sanctions are applied to enforce compliance. The exact penalties are determined by the courts, taking into account the specific circumstances of each case. The Regulations also ensure compatibility with human rights, as affirmed in Attachment B. The Statement of Compatibility with Human Rights, prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, confirms that the Regulations do not engage any of the applicable rights or freedoms recognised in the international instruments listed in the Act. Consequently, the Legislative Instrument is deemed compatible with human rights, as it does not raise any human rights issues and does not infringe upon the freedoms and rights recognised under international law. This compatibility ensures that the Regulations can be implemented without violating the principles of human rights protection.