Corporations (Standards Body) Declaration 2017

Overview

The Corporations (Standards Body) Declaration 2017 was enacted to address the need for a standards body to be established under the Corporations Act 2001. This Declaration, made by Mathias Cormann, the Acting Minister for Revenue and Financial Services, identifies the Financial Adviser Standards and Ethics Authority Ltd (FASEA) as the standards body. The Declaration was made under section 921X of the Corporations Act 2001 and took effect on the day following its registration. The policy objective underpinning this legislation is to ensure that FASEA, as the designated standards body, is likely to comply with its obligations under the Corporations Act 2001 and other relevant Commonwealth laws, thereby enhancing the regulatory framework for financial advisers in Australia. This establishment aims to promote high professional standards and ethical conduct within the financial advisory sector.

Scope and Application

The Corporations (Standards Body) Declaration 2017, issued under the authority of section 921X of the Corporations Act 2001, designates Financial Adviser Standards and Ethics Authority Ltd as the standards body. This declaration applies to Financial Adviser Standards and Ethics Authority Ltd, a specified entity within the Australian financial services sector, which is recognised for its potential to meet the obligations imposed by the Corporations Act 2001 and other relevant Commonwealth laws. The jurisdictional reach of this Act is national, affecting entities and individuals operating under the purview of the Corporations Act 2001 across Australia. The declaration outlines that Financial Adviser Standards and Ethics Authority Ltd is likely to comply with the necessary standards, ensuring that it can effectively perform its duties as a standards body. This declaration takes effect from the day it is registered and serves to formalise the entity's role in setting and enforcing industry standards, subject to the overarching legislative framework provided by the Corporations Act 2001.

Key Provisions

The Corporations (Standards Body) Declaration 2017, made by the Acting Minister for Revenue and Financial Services under section 921X of the Corporations Act 2001, designates Financial Adviser Standards and Ethics Authority Ltd (FASEA) as the standards body. This declaration becomes effective on the day after its registration, as stipulated in section 2. The declaration process, outlined in section 3, hinges on the Acting Minister's satisfaction that FASEA is likely to meet its obligations under the Corporations Act 2001 and other relevant Commonwealth laws. This satisfaction, as required by section 921X(2)(b) of the Act, is detailed in section 4 of the Declaration. Under the Corporations Act 2001, the declaration imposes specific obligations on FASEA, which must ensure compliance with its duties as outlined in the Act and other pertinent laws. This includes maintaining standards that promote the interests of investors and consumers, as well as ensuring that financial advisers adhere to ethical and professional standards. FASEA's responsibilities extend to the development and enforcement of codes of conduct, and the provision of guidance to financial advisers. These obligations are designed to safeguard the financial system and maintain public confidence in the financial advice sector. Breaches of the obligations imposed by the Corporations Act 2001 can result in both civil and criminal consequences. For instance, individuals or entities that fail to comply with the standards set by FASEA may face penalties under the Act. The maximum penalties for corporate offences can include substantial fines, with specific amounts depending on the nature and severity of the breach. Furthermore, individuals involved in the management or operations of the corporation may also be subject to personal penalties, including fines and imprisonment. The Act provides a framework for enforcement actions that can be taken against those who do not adhere to the standards and requirements set forth by the legislation.