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FNS50217 | FNSFMK505 Comply with Financial Services Regulation and Industry Codes of Practice Trainer’s Guide | V 2.0 | Apr 2018 Assessment Task 1: Research: AFS Compliance – Regulatory Reforms Assessment Task Research: AFS Compliance – Regulatory Reforms Schedule TBA Outcomes Assessed Performance Criteria: 1.1, 1.2, 1.3, 1.4, 2.1, 2.2, 2.3 Addresses some elements of required skills and knowledge as shown in the Assessment Matrix Description: The provision of financial services and products is regulated in Australia by Chapter 7 of the Corporations Act 2001 (Cth) (Corporations Act). The regulatory framework creates a uniform licensing (Australian Financial Services (AFS) licensing) and disclosure regime for financial services and products. The Australian Securities and Investment Commission (ASIC) is responsible for AFS licensing and supervision of financial services providers, consumer protection in the financial services industry and for enforcement of the financial services laws in general. The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 commenced on 15 March 2017. It introduced several measures in the Corporations Act 2001 (Corporations Act) to raise the education, training and ethical standards of financial advisers providing personal advice to retail clients on more complex financial products. In this assessment task, you will be required to research the licensing and compliance requirements for an Australian Financial Service (AFS) license, and analyse the changes made under the reform. Context For the purpose of providing an organisational and work context, assume that you work as an Investment Intern at one of the financial management firms in the city. You are completing your internship at the firm and looking forward to applying for a license as a financial service provider. There are four other interns at the firm same as you, and any changes in the regulatory requirements for licensing will also affect them. Accordingly, assume that your Manager (trainer/assessor roleplay) has asked you to conduct due research, identify the relevant documents and analyse their impact on the requirements for financial advisors and firm’s obligations. The policy on implementing regulatory changes at the firm broadly require that a file review be conducted on the roles affected by the changes. Any changes in the regulatory and licensing requirements must be noted and communicated to the Manager (trainer/assessor roleplay) as soon as practicable; Source and reference documents (e.g. updated standards, licensing requirements, training requirements etc.) must be identified and downloaded for records; Roles relevant to, or being impact by, the regulatory changes must be identified, and the Position Description reviewed and updated More information can be found at: http://asic.gov.au/regulatory-resources/financial-services/professional- standards-for-financial-advisers-reforms/ Task http://asic.gov.au/regulatory-resources/financial-services/professional-standards-for-financial-advisers-reforms/ http://asic.gov.au/regulatory-resources/financial-services/professional-standards-for-financial-advisers-reforms/ FNS50217 | FNSFMK505 Comply with Financial Services Regulation and Industry Codes of Practice Trainer’s Guide | V 2.0 | Apr 2018 Page 2 of 17 Accordingly, research, gather and organise the following information in relation to an Australian Financial Service (AFS) license; Reference documentation and source Obligations for an AFS licensee An analysis of the new changes under the reform Meeting the general obligations as an AFS licensee under the new reforms Training of financial product advisers Financial product advisers: Conduct and disclosure Relevant legislation, regulations, and codes impacting financial services industry Strategies for professional development and knowledge of legislative changes and legislative and regulatory sources of information You may use ASIC’s AFS regulatory guides as references. Your task is to provide a summary of key sections of these guides based on your research and understanding. Ensure that you cite all external sources to avoid the risk of plagiarism. Collect and summarise the information in a structured word-processed document with appropriate headings and/or sub-headings. Where applicable, identify and provide a brief explanation of applicable laws, regulations and/or codes of conducts. Assessment Criteria The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work. The document shows relevant research in gathering, reading and synthesising the required information Referred to The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 to review the reforms An analysis of the changes is provided in the view of existing licensee requirements Referenced relevant ASIC regulatory guides for respective subject areas Demonstrated an overall understanding of the component of the regulatory framework around Australian financial services Made references to relevant laws, regulations and/or codes of conduct where applicable Described key obligations as an AFS licensee based on ASIC requirements under the legislation and the reform Researched and complied information on relevant legislations, regulations, and codes relevant to the financial services industry and information sources Suggested strategies for professional development for financial services professionals that help keep abreast of changing legislative and sector/industry environment Analysed an appropriate regulatory guide to articulate and summarise general obligations as an AFS licensee Analysed an appropriate regulatory guide to articulate and summarise the needs for Training of financial product advisers as an AFS licensee Analysed an appropriate regulatory guide to articulate and summarise the responsibilities and obligations for conduct and disclosure as an AFS licensee All the main areas of respective regulatory guides are covered and summarised without losing their original context and meaning Organised the information in a logical structure and format that can be easily communicated to another person for information and reference FNS50217 | FNSFMK505 Comply with Financial Services Regulation and Industry Codes of Practice Trainer’s Guide | V 2.0 | Apr 2018 Page 3 of 17 Submission Guidelines Submit: AFS Obligations and compliance summary document (Word processed) Copies of relevant legislations, regulations and codes (relevant parts) Electronic versions of the assessment task and email/electronic submission arrangements are at further discretion of the trainer/assessor. FNS50217 | FNSFMK505 Comply with Financial Services Regulation and Industry Codes of Practice Trainer’s Guide | V 2.0 | Apr 2018 Page 4 of 17 Assessment Task 2: Develop and Present an Internal Monitoring Program Assessment Task Develop and Present an Internal Monitoring Program Schedule TBA Outcomes Assessed Performance Criteria: 1.1, 1.5, 2.1, 2.2, 2.3, 2.4, 3.3 Addresses some elements of required skills and knowledge as shown in the Assessment Matrix Description: This task builds on the research conducted on The Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 reforms for financial services advisors. As in the previous task, you will continue to use the same organisational profile and your given role in this task. Your trainer/manager will play the role of you Manager for the purpose of this task. the Auditing and Assurance Standards Board (AUASB) prepares Auditing and Assurance Guidance Statement (AGS) to provide general guidance to auditors on various matters relating to the audit requirements for Australian financial services (AFS) licensees in accordance with the requirements of the Corporations Act 2001 (the Corporations Act). Under the Corporations Act, the responsibilities of an AFS licensee are imposed by ASIC Policy Statement RG166 Licensing: Financial requirements. They can be found at; AUASB – Auditing and Assurance Guidance Statement: http://www.auasb.gov.au/admin/file/content102/c3/AGS1068_10-04b.pdf ASIC: RG166: http://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-166-licensing- financial-requirements/ With reference to the above, assume that your firm has asked to develop and implement an audit and compliance monitoring program. The implementation will be in form of an information session (presentation) delivered to the class audience playing the role of the organisational stakeholders. Your trainer/assessor will organise the session. Task Your Manager (trainer/assessor roleplay) has asked you to undertake the following activities in view of the changes in the regulations (Assessment Task 1) and audit and assurance requirements under the above regulatory provisions. Accordingly; Implications of changes in the regulatory requirements on the role of – FINANCIAL SERVICES ADVISOR Process for obtaining the license and maintaining regulatory compliance; Regulatory and policy implications on the firm to ensure that its advisors stay compliant; Develop a step-by-step process for monitoring compliance at the firm supported by an internal auditing process in accordance with the AGS; http://www.auasb.gov.au/admin/file/content102/c3/AGS1068_10-04b.pdf http://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-166-licensing-financial-requirements/ http://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-166-licensing-financial-requirements/ FNS50217 | FNSFMK505 Comply with Financial Services Regulation and Industry Codes of Practice Trainer’s Guide | V 2.0 | Apr 2018 Page 5 of 17 Types of record to be maintained for on-going compliance You will need to structure and present the above information in form of an official/formal report. As a principle, a report concentrates on facts, and sets outs and analyses a situation or a problem followed by recommendations. A report typically covers; A description and overview of the regulatory changes; A brief Interpretation of the significance of these changes (your own analysis supported by facts and other reports/publications); An evaluation of the facts or the results of your research; Discussion of the likely impact and audit and compliance procedures; Specific responsibilities of the firm, advisors and other employees; and Conclusions While there is no word limit for the report, it is expected that the content will sufficiently address the above requirements and demonstrate appropriate research to justify the recommendations. As a guide, each of the above sections should not exceed one single-sided A4 sheet. Presentation Once completed, present the report to the class using PowerPoint, assuming the class audience as organisational stakeholders. Allow for questions and answers and include a summary of audience feedback as an appendix/annexure of your report. Presentation Duration: 10 minutes Assessment Criteria The following assessment criteria will be used for marking this assessment task. Ensure that you have addressed all of the criteria in your work. Used an appropriate and approved organisational context for this task (Ref Assessment Task 1) and followed the policy requirements Maintained the given role and undertook consultation as required Was able to access, identify and understand the extent of regulatory changes and the impact on licensing