A new regulation is to be made to provide relief from the Financial Services Reform Act 2001 (FSRA) for accountants who provide advice to their clients on the decision to acquire or dispose of an interest in a self managed superannuation fund (SMSF).
The Government accepts that such advice should not require licensing under the FSRA regime. The new regulation will be consistent with a recommendation made by the Parliamentary Joint Committee on Corporations and Financial Services which considered this matter.
The regulation would be limited to ‘recognised accountants’ that hold appropriate qualifications to provide the advice (the relevant professional membership qualifications are attached). A recognised accountant would be exempted from the previous restriction in Corporations Regulation 7.1.29 that they not make ‘a recommendation that a person acquire or dispose of a superannuation product’ in relation to a SMSF. The exemption will not cover the provision of advice about the particular investments that a SMSF may hold and such advice will remain subject to FSRA licensing.
T he new regulation is intended to promote certainty for accountants. It acknowledges the important role that accountants currently play in providing a range of professional advice and expertise to their business and other clients.
It ensures that advice on the establishment of a SMSF, which often forms a part of overall business arrangements, is treated comparably with other FSRA exempt advice provided to a client, such as on business structuring and taxation. The exemption for advice on the establishment of a SMSF is in keeping with the policy of exempting such advice from the FSRA.
I wish to thank Australian Democrats Senator Andrew Murray for his contribution to the development of this regulation and the implementation of the Government’s financial services reform agenda.
The regulation will have effect from the end of February 2004, before the conclusion of the FSRA transitional period on 11 March 2004.
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Recognised Accountant
A ‘recognised accountant’ for the purposes of the regulation will be:
- members of CPA Australia who are entitled to use the post-nominals “CPA” or “FCPA”, and are subject to and comply with CPA Australia's continuing professional education requirements;
- members of The Institute of Chartered Accountants in Australia (ICAA) who are entitled to use the post-nominals “CA”, “ACA” or “FCA”, and are subject to and comply with ICAA's continuing professional education requirements;
- members of the National Institute of Accountants (NIA) who are entitled to use the post nominals “PNA”, “FPNA”, “MNIA” or “FNIA”, and are subject to and comply with the NIA's continuing professional education requirements.