The Australian government on Oct. 11 announced plans to set up a new disciplinary system and a disciplinary watchdog for financial advisers by 2021.
The announcement came months after Australia's royal commission into misconduct in the banking, superannuation and financial services industry in February recommended that the government revise laws to set up a new disciplinary system for financial advisers that requires them to be registered and that all compliance concerns should be reported to a disciplinary body.
The new disciplinary system will replace the role of code monitoring bodies that were due to be established by industry associations under professional standards reforms, Australia's Treasurer Josh Frydenberg and Sen. Jane Hume said in a joint statement. They said the plan is subject to the passage of legislation that will be introduced into the Parliament in 2020.
A code of ethics will come into effect by law from Jan. 1, 2020. Financial advisers will be required to follow the code, while Australian financial services licensees will take necessary steps to ensure their representatives comply with the code. In addition, the Australian Securities and Investments Commission will take action against licensees that fail to comply.
