Australia: ASIC's relief power and how financial service providers can adapt to changes in the law

In brief - Financial service providers (FSPs) must be aware of current legislation and regulations

It is vital for FSPs to stay up to date with changing legislation and regulations and to be aware that ASIC has the power to grant relief in circumstances where the FSP may technically be in breach of the Corporations Act 2001 (Cth).

ASIC's power to grant exemptions from the operation of the Corporations Act

The Australian Securities and Investments Commission (ASIC) recently published its up-to-date decisions dealing with its "relief power". The "relief power" is ASIC's ability to grant exemptions or modifications to the operation of the Corporations Act. It may also provide relief under certain parts of the National Consumer Credit Protection Act 2009 (Cth) and its contingent laws.

ASIC's most recent findings were publicly released last month and are available online at Report 371: Overview of decisions on relief applications (February to May 2013) (ASIC Report). The ASIC Report is designed as a "roadmap" of recent issues that have come to its attention and mostly relates to statutory breaches.

Complexity of laws governing financial service providers

For many Australian financial service providers (FSPs), there can be difficulties in uncovering just how the current law affects their business (the 2013 corporations law suite is over 2,300 pages long). Some problem areas include:

  • How to market and publish while complying with the law
  • How to manage client relationships appropriately
  • Best measures (or appropriate measures) for providing formal and informal financial services to clients
  • What legal boundaries exist for advisers, product providers and lenders

Relief granted to FSPs between February and May 2013

From February to May of 2013, ASIC dealt with 875 applications from various applicants including small, medium and large FSPs. It granted relief in 425 applications. In its review, the main areas of relief that ASIC dealt with were:

FSP licensing relief — licence approval compliance, remuneration issues and risk insurance. In one case, relief was granted in some circumstances where remuneration arrangements would otherwise be a potential breach of the Corporations Act.

Disclosure relief — relief to companies involved in initial public offerings (IPOs), restructures and employee share schemes. Certain relief was granted where, for instance, shareholders on-sold shares without disclosure after an IPO, though only in certain circumstances.

Managed investment relief — relief for persons affected by hardship, buy-back schemes and various compensation arrangements or schemes. For instance, relief was rejected by ASIC in two instances where the responsible entity was an illiquid managed investment scheme attempting to allow investors to withdraw funds on hardship grounds.

Mergers and acquisitions relief — relief for IPO-related issues, shareholder rights and buy-back difficulties. ASIC allowed one private company to undertake a tender-style buy-back of shares without shareholder approval.

Conduct relief — no decisions were made, but ASIC published guidance on the issue in Regulatory Guide 248 - Litigation schemes and proof of debt schemes: Managing conflicts of interest and Report 338 — Response to submissions on CP 185 Litigation schemes and proof of debt schemes: Managing conflicts of interest.

Credit relief — no decisions were made, but ASIC again published guidance in Report 330 — Review of licensed credit assistance providers' monitoring and supervision of credit representatives.

Miscellaneous relief — the need for FSPs to issue new statements of advice to existing clients of FSPs. It was decided that in certain circumstances, a new statement of advice was not required where advisers were switching dealer groups, which decision will be important for advisers moving to new Australian Financial Services Licence holders.

FSPs need to educate themselves about the new laws and seek guidance

The information set out in the ASIC Report is highly specific and, for someone without time to read it, could go unnoticed. However, although it is dense and contains technical language, the ASIC Report is designed to educate the market and provide some guidance. Such education is sorely needed.

Since the introduction of the Corporations Amendment (Future of Financial Advice) Act 2012 (Cth) and the Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 (Cth) (FOFA), the Australian financial industry will need to self-educate or seek guidance across the market. The industry itself has been visibly rallying in an attempt to adjust to or oppose the government's FOFA regime.

Licensing, product standards, advertising, disclosure and dispute resolution

In the author's view, FOFA itself calls for both a broad and specialised industry focus on major issues such as:

  • Licensing measures and compliance
  • Meeting dispute resolution regulatory obligations
  • Targets for adviser and product standards (there can be pitfalls in relying upon the opinion of research houses since decisions such as Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200, where product research providers were found to have provided questionable advice)
  • Appropriate advertising to the market
  • Higher-level benchmarks for disclosure requirements
  • Statutory quasi-fiduciary duties for remuneration
  • Refinement of and compliance with internal and external dispute resolution measures and procedures

While this is merely a handful of examples, they each raise a similar question as to how a small, medium or large FSP can adjust to the new regime and how their clients can best fit within that framework.

FSPs need to be aware of regulatory guides that apply to their business

This author considers that two issues arise from the ASIC Report. First, does it do enough to educate the market? And secondly, are ASIC's relief measures sufficient?

In a nutshell, these answers depend on the FSP in question. The ASIC Report is technical. It requires analysis and focus. An example is the heading "Equal treatment relief to facilitate compensation arrangements consistent with RG 94" (see page 20 of the ASIC Report). Without an understanding of Regulatory Guide 94 (ASIC and APRA's joint guide on good practice for unit pricing, for instance in a property investment), an FSP may not even read this section.

However, if that FSP is a product issuer, it should be familiar with RG 94. Further, if it is not, it could read the ASIC Report and take some heart that ASIC has the power to award relief in certain circumstances where unit pricing is done in error.

FSPs should be aware that ASIC has the power to grant relief

As to whether the relief measures are appropriate, the ASIC Report is not sufficiently detailed to make a positive conclusion.

However, it is important for FSPs to know that there are in fact alternative measures available in circumstances where the FSP may technically be in breach of the Corporations Act.

FSPs should establish a learning mechanism to stay up to date with the law

It will be important in future for FSPs to continue monitoring developments in the law. Crucially, the governing body is ASIC. The ASIC Regulatory Guides are constantly changing, but also are constantly applicable to an FSP's business.

While it can be costly to reconfigure a business model to comply with legal obligations, it is important that FSPs maintain a learning system or method to adapt to the constantly changing obligations of the law.

Financial service providers can take steps to keep their knowledge current

In summary, and based on information contained in the ASIC Report, FSPs may wish to:

  • Review ASIC's regulatory guides as they are published
  • Revisit old regulatory guides to check amendments
  • Monitor internal compliance systems and audits
  • Assess the weight and information contained in research providers' findings
  • Remember that there are avenues for seeking relief from ASIC in certain circumstances
  • Maintain a working system of accountability and reporting both internally and externally
  • Not rely on old systems and measures which may not comply with the current law

James Stanton

Key Contact:
Kemsley Brennan
Professional indemnity
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.