27 November 2017
Earlier this month, ASIC released further guidance around use of terminology that implies independence.
Previously, AFS licensees and their representatives were restricted from using the words ‘independent’, ‘impartial’ and ‘unbiased’ to describe their business, unless certain criteria were met. The further guidance released by ASIC expands the application of these restrictions to the terms, ‘independently owned’, ‘non aligned’ and ‘non institutionally owned’.
If in doubt, any terminology that implies independence cannot be used unless those certain criteria are met.
When can this terminology be used?
AFS Licensees and their representatives are able to use terminology that implies independence to describe their business if the following criteria are met:
- they do not receive commissions; forms of remuneration that are volume based; or other gifts or benefits from product issuers that may reasonably be expected to influence;
- they operate free from direct or indirect restrictions relating to the financial products on which they provide financial services; and
- they are free from conflicts of interest that might arise from any relationships with product issuers and which might reasonably be expected to influence.
If you would like to discuss how these restrictions apply to your business, please get in touch with Julia on 0401 193 473 or Eloise on 0404 133 979.