Fact sheet: Financial Advisers Act (Australian Qualified Advisers) Exemption Notice 2012.
1. What is the purpose of the exemption?
The exemption provides recognition for Australian qualified
advisers when they apply to be Authorised Financial Advisers
(AFAs). ASIC is providing mutual recognition for New Zealand
Prior to the grant of this exemption, the only avenue for recognition of Australian qualified advisers when they applied to be licensed advisers in New Zealand (ie AFAs) was through Trans-Tasman Mutual Recognition (TTMR) legislation. However this legislation has very limited application to financial advisers as it applies only to individuals (ie not firms) who are Australian licence holders when they apply to be authorised/registered under the New Zealand financial adviser regime.
FMA and ASIC have mutually agreed to provide recognition of each other's qualified advisers in addition to the recognition under the TTMR legislation.
2. What is the nature of this exemption?Certain Australian advisers who meet the qualifications requirements under ASIC's regulatory guides to provide personal financial product advice to retail clients, will be given recognition when applying to be an AFA. This will only be in relation to the products they are qualified to advise on in Australia, where New Zealand has an equivalent licence.
The Australian adviser must have provided the services to retail clients for at least six consecutive months in the three years prior to the NZ AFA application, either as an Australian representative or Australian licence holder.
3. What is the extent of exemption?This is only an exemption from the educational qualifications requirements under the Code. The adviser will be subject to:
- the other eligibility requirements for AFAs (for example good character and criminal record checks, registration requirements, including dispute resolution scheme membership);
- standard terms and conditions of authorisation as may be modified by FMA. In particular the terms and conditions will include a requirement for the AFA to complete structured training in the first year of authorisation covering knowledge of the Financial Advisers Act, the Code and other relevant legal obligations;
- all the other provisions of the Code, including
- Code Standard 14 which contains the overarching requirement that an AFA must have the competence, knowledge and skills to provide a service.
- Code Standard 15 requirement to have knowledge of the Financial Advisers Act and Code and other legal obligations. Attaining Unit Standard Set B of the National Certificate of Financial Services (Financial Advice)(Level 5) and other structured training are some of the ways an adviser can demonstrate that they have this knowledge;
- the provisions of the Financial Advisers Act, including conduct and disclosure obligations, monitoring and oversight by FMA and referral to disciplinary committee in the event of breach of the Code.
4. Who is most likely to utilise this exemption?Primarily those Australian adviser representatives who are moving permanently to New Zealand. However it may also be utilised by Australian adviser representatives who work for an Australian based entity and who wish to be Authorised Financial Advisers, rather than come within the Australian Licensees Exemption Notice.
5. What types of AFA licence will an Australian adviser be able to apply for under the exemption
The Schedule to the Exemption Notice shows what services under
RG 146 and RG 206 that the adviser must be qualified to provide and
the corresponding AFA licence scope and financial products that the
adviser may apply for.
For example an adviser that meets the RG 146 requirements to provide personal advice to retail clients on securities, derivatives and managed investment services will be able to apply for an authorisation to provide financial advice on all financial products. We note, in addition to the specialist knowledge requirements, this adviser will need to have met the generic knowledge and skill requirements under RG 146. The adviser must also have worked as an Australian representative or Australian licence holder for at least 6 months within the three years prior to the AFA application.
6. What is the procedure for an Australian adviser applying to be an AFA through the exemption?Advisers should first notify FMA that you are considering applying as an Australian adviser under the Exemption.
We will check if you meet the key criteria for Australian Qualified Advisers and review your Australian qualifications. We will discuss the New Zealand AFA licence scope and financial products you are eligible to apply for.
Once confirmed the procedure will be:
- complete the usual application for registration as a financial adviser online on the Financial Service Providers website, including paying the registration fee
- do not carry on to complete the AFA part of the online application. Instead, complete the Australian Qualified Advisers AFA application form we provide when notifying you are eligible to apply. You will be required to attach supporting documents.
- The usual fees for AFA applications will be payable to FMA and
FMA will confirm how these should be paid.
See AFA fees
7. When does the exemption come into effect?
The exemption came into effect on 6 July 2012 and expires on 6 July 2015. During this period Australian advisers who meet the terms of the exemption may apply to be AFAs with certain licence scopes, and will be exempt from the Code's educational qualification requirements. If the licence term extends beyond the expiry date of the Exemption Notice, the Australian adviser will be required to comply on renewal of his/her licence with the Code's educational qualification requirements at that time (subject to any applicable exemption in place at that time).
8. Where can I find further
Please read the Exemption Notice or contact us for more information:
For further information on ASIC's recognition of New Zealand advisers: