The Australian Securities and Investments Commission (ASIC) will provide regulatory relief for advisers from current compliance scheme obligations, following the Government decision to establish a single disciplinary body for the sector.

The disciplinary body – which is yet to be named – will displace the role of compliance schemes in monitoring and enforcing the code of ethics created by the Financial Adviser Standards and Ethics Authority.

An alliance of the Financial Planning Association of Australia, the Association of Financial Advisers, the Boutique Financial Planners, the Financial Services Institute of Australasia, the Self-Managed Super Fund Association, and the Stockbrokers and Financial Advisers Association of Australia was planning to register Code Monitoring Australia (CMA) on January 1 to oversee code compliance. Those plans have now been withdrawn.

ASIC will immediately ensure that advisers will not be in breach of the law because of their failure to register with the CMA and grant a three-year exemption from their obligations in the Corporations Act to give them time to register with the new scheme.

They still have to take reasonable steps to ensure that their financial advisers comply with the code from January 1.

The industry criticised the Government’s decision to supersede the CMA with its own body, which came just a month before the advisers had to register.

“[The] announcement by the Government makes it unreasonable for us to proceed with CMA,” a joint letter by the six financial adviser bodies says. “We need to avoid adding complexity, further duplication and cost to the regulation of financial advice.”

Treasury aims to have the new system ready in early 2021, subject to legislative approval.