Broker compliance certificates under ASIC microscope

by BN14 Nov 2012

Brokers need to be extra careful when filling out their Annual Compliance Certificate applications this year, after confirmation that the regulator will be scrutinising them carefully.

QED Risk director Greg Ashe has confirmed that ASIC will be checking up on responses in brokers’ 2011 compliance application forms and says many in the industry don’t realise when they’ve filled in the applications incorrectly.

“The annual compliance certificate process hasn’t changed at all [this year] - what is different is the level of checking that we know goes on," Ashe said.

"Last year, I was just making a calculated guess at the layers of control but this time round we’ve seen the evidence and we know that ASIC has been checking on the responses that people gave.”

Ashe believes that the terminology used in the form can be confusing for applicants and that many brokers focus almost exclusively on responsible lending when, after viewing the application forms, Ashe says there are no questions referring to responsible lending in the application.

“Its all about the general conduct obligations, which is what we believe at least 90 per cent of the industry is completely missing.”

While he stresses that brokers must place a high level of importance on responsible lending, Ashe would like to see more attention paid to other compliance issues.

“Responsible lending is definitely the highest risk obligation that brokers have, however by completely focusing on that you’re running serious risk of failing in other areas. I’m not saying don’t worry about responsible lending,  but there are other things that are increasingly important. “

Applicants who appear to fill out their forms dishonestly (intentionally or not) face major fines and public shaming at the hands of ASIC. “Brokers face a maximum fine of $220,000, though the real fear is public flogging – a public shaming,” Ashe said.


  • by Daniel Blaine 14/11/2012 10:47:24 AM

    A gross misdirection of resource. ASIC is merely a policy and procedures organisation. It has proven ineffective in addressing risky behaviour by organisations. If the forms are correctly completed ASIC is satisfied. A major impost on over 95% of brokers and planners.