Financial Adviser Standards and Ethics Authority Ltd
Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020
Explanatory Statement
Key information
- This instrument amends the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018 by modifying the current requirements for continuing professional development (CPD) that relevant providers (financial planners and financial advisers) must undertake to meet the fourth of the education and training standards under section 921B of the Corporations Act 2001 (see subsection 921B(5) of the Act). The modification is made to provide relief to relevant providers whose ability to complete the CPD requirements has been impacted by COVID-19.
- Date of effect: the day after the instrument is registered in the Federal Register of Legislation (see section 2 of the determination).
Glossary
3. Words and expressions used in this statement are defined in the following table.
Expression | Meaning |
Act | the Corporations Act 2001. |
Authority | Financial Adviser Standards and Ethics Authority Ltd, which is the standards body under section 921X of the Act. |
education and training standards | the standards set out in section 921B of the Act. |
CPD | short for “continuing professional development”. |
relevant provider | defined in subsection 910A of the Act. |
4. References to numbered sections or other provisions are to those sections or other provisions of the instrument, unless indicated otherwise.
Context
5. Section 921B of the Act sets standards that relevant providers must meet (education and training standards).
6. The fourth of the standards requires a person to meet CPD requirements set by the Authority. The Authority has set requirements for CPD in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018.
7. This instrument extends the period relevant providers have to complete their CPD requirements for CPD years that include 18 March 2020, to provide relief to relevant providers in the context of COVID-19.
Preliminary matters
8. Section 1 provides that the name of the instrument is the Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020.
9. Section 2 provides that the instrument commences on the day after it is registered in the Federal Register of Legislation.
10. Section 3 sets out the legislative authority for making the instrument: subparagraph 921U(2)(a)(iv) of the Act.
11. Section 4 amends the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018 as set out in Schedule 1 of the instrument.
Schedule 1: Amendments
12. Subparagraph 921U(2)(a)(iv) of the Act requires the Authority to set requirements for CPD purposes in relation to the CPD year of a financial services licensee. The Authority has done this in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018.
13. Item 1 of Schedule 1 of this instrument inserts a new subsection 9(7) into the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018. The new subsection enables relevant providers whose CPD year includes 18 March 2020 to count towards their CPD requirements for that CPD year any qualifying CPD activities they have completed during a period of 3 months after the end of that CPD year. Those activities may not be counted towards meeting the CPD requirements for any other year.
14. The effect of this amendment is that a relevant provider whose CPD year includes 18 March 2020 has a further 3 months to complete the CPD requirements for that CPD year.
15. 18 March 2020 is the date on which the Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential) Declaration 2020 came into force. It marked the formal recognition by the Commonwealth of the COVID-19 emergency. Although the declaration is to remain in force for a limited period, this does not affect relevant providers’ ability to claim the relief provided by this instrument, even after the COVID-19 emergency period ends.
Consultation
16. The Authority undertook public consultation in June 2020 in connection with this instrument. All feedback was given due consideration. The Authority concluded that the instrument provides adequate relief for relevant providers in relation to the requirements for CPD.
17. The Authority considers that a relatively short period of consultation is appropriate because of the urgent and beneficial nature of this instrument, as well as its limited scope.
Regulatory impact
18. The Office of Best Practice Regulation has confirmed that no Regulatory Impact Statement is needed for the determination.
Statement of compatibility with human rights
19. The instrument does not engage any human rights or freedoms, and is assessed to be compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
The Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020, enacted by the Financial Adviser Standards and Ethics Authority Ltd, was introduced to address the challenges faced by financial advisers and planners in meeting their continuing professional development (CPD) requirements during the COVID-19 pandemic. The amendment provides relief by extending the period within which relevant providers can complete their CPD requirements for CPD years that include 18 March 2020. This date marks the formal recognition of the COVID-19 emergency by the Commonwealth through the Biosecurity (Human Biosecurity Emergency) (Human Coronavirus with Pandemic Potential) Declaration 2020. The instrument aims to ensure that relevant providers are not disadvantaged by the disruptions caused by the pandemic, while still maintaining professional standards. The instrument was registered and took effect on the day after its registration in the Federal Register of Legislation, as stipulated in section 2 of the determination.
Scope and Application
The Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020 applies to relevant providers, which are defined as financial planners and financial advisers under the Corporations Act 2001. The amendment is made to provide relief to these relevant providers whose ability to complete the continuing professional development (CPD) requirements has been impacted by COVID-19. The instrument extends the period these providers have to complete their CPD requirements for CPD years that include 18 March 2020, the date on which the COVID-19 emergency was formally recognised by the Commonwealth. The amendment does not specify any exclusions, exemptions, or thresholds, but it does provide that the qualifying CPD activities completed during the extended period may not be counted towards meeting the CPD requirements for any other year. The instrument commences on the day after it is registered in the Federal Register of Legislation. The Financial Adviser Standards and Ethics Authority Ltd, the standards body under the Act, undertook public consultation in June 2020 in connection with this instrument and concluded that it provides adequate relief for relevant providers in relation to the requirements for CPD.
Key Provisions
The main operative sections of the Corporations (Relevant Providers Continuing Professional Development Standard) Determination (Amendment) 2020 (F2020L00912) are set out in Schedule 1, which amends the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018. Specifically, subsection 9(7) is inserted into the Determination 2018, enabling relevant providers to count any qualifying continuing professional development (CPD) activities completed during a 3-month period after the end of their CPD year towards their CPD requirements, provided their CPD year includes 18 March 2020 (subsection 9(7)). This amendment allows for flexibility in meeting CPD requirements for relevant providers whose professional development has been impacted by COVID-19.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for relevant providers, such as financial planners and financial advisers, to undertake continuing professional development to meet the fourth of the education and training standards under section 921B of the Corporations Act 2001 (subsection 921B(5)). The Financial Adviser Standards and Ethics Authority Ltd (Authority) sets these CPD requirements in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018. Under the Amendment 2020, relevant providers whose CPD year includes 18 March 2020 can extend their CPD completion period by up to three months, offering them relief in light of the COVID-19 pandemic.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches of the CPD requirements as amended by this instrument. However, any non-compliance with the CPD requirements as stipulated in the Corporations Act 2001 and the Determination 2018 could potentially lead to regulatory action against the relevant providers. Such actions may include sanctions from the Authority or other regulatory bodies, which could have significant professional and reputational impacts on the providers. Given the context of COVID-19, the Authority has provided a temporary relief measure to ensure compliance is manageable during this exceptional period.