Industry codes of conduct should contain provisions “substantially similar” to the opt-in requirement in the Future of Financial Advice (FOFA) legislation, according to the Australian Securities and Investments Commission (ASIC).

Sarah Edmondson, the regulator’s Senior Manager, Financial Advice Codes, says the code approval process will be careful, rigorous and take months to complete.

She told an Association of Financial Advisers event last week that FOFA gives ASIC the power to exempt advisers from the opt-in obligation if the adviser is signed up to a professional code that removes the need for opt-in.

ASIC expects approved codes to achieve substantially the same outcomes as the opt-in requirement.

“We’re talking about engaged retail clients who receive value services for the ongoing fees that they pay,” she said.

The codes must not be inconsistent with the law and so must be consistent with the FOFA reforms. When developing its approach to code approval, ASIC will take into account its consultation on the best interests test and conflicted remuneration.

Ms Edmondson says ASIC’s current powers to approve codes of conduct under section 1101A of the Corporations Act make it clear codes cannot be entered into lightly.

Applicants must explain how their codes will be reviewed and enforced, she says. They must also consult with interested stakeholders, including consumers, while developing their codes.

ASIC expects to issue a consultation paper in October, finalise its policy by the end of this year and accept applications for code approvals from early next year.