You’re the holder of an Australian financial services licence, so how do you know just when you’ve committed a reportable breach?

Weird as it may seem, the Australian Securities and Investments Commission (ASIC) now has a guide to help you work out when you’ve done the wrong thing and have to come clean. Under the Corporations Act, licensees are required to identify their own breaches and determine whether they warrant the regulator’s attention.

Executive Director FSR Ian Johnston says licensees should tell ASIC about a breach as soon as possible, even if they are still collecting information. “There are penalties for not complying, so we recommend erring on the side of caution.”

These factors are important when evaluating a breach:

• The number of breaches you’ve had;
• The effect on your ability to provide financial services;
• Whether it indicates your compliance arrangements are inadequate;
• Potential financial loss to clients.