The Australian Securities and Investments Commission (ASIC) is planning more “real time” regulation of the financial services industry rather than always opting for the lengthy process offered by court action, says Chairman Jeffrey Lucy.

Speaking at the Investment and Financial Services Association conference on the Gold Coast last week, he said enforceable undertakings such as that recently negotiated between ASIC and AMP Financial Planning will become more common.

Court proceedings will still be part of the ASIC arsenal, but Mr Lucy says the legally backed penances offer a better, more immediate response to conflict of interest in financial services.

An ASIC review found AMP advisers sometimes failed to disclose a reasonable basis for their services, failed to make proper disclosures about their recommended products and did not have adequate processes for managing conflict of interest. AMP volunteered to make amends through an enforceable undertaking with ASIC.

Mr Lucy says that example should help guide financial advisers on what the regulator is looking for, particularly in conflict of interest cases.

“[It] provides an extremely important insight for your industry as to what AMP and ASIC consider to be the appropriate way of dealing with important issues affecting the way business should be done,” he said.

Mr Lucy also warned financial services licensees that transitional arrangements will expire on December 31. After that, they must have policies in place to deal with compensating clients in the event of a breach of licence conditions.