The Australian Law Reform Commission (ALRC) has proposed changes to the Corporations Act to help make the rules applying to financial advice easier to find and understand. 

The third interim report in a three-year inquiry launched to simplify financial services laws and regulations proposes introducing a single legislative chapter that would bring together all provisions that only regulate financial advice. 

“This restructure seeks to reflect the needs and expectations of users of the law, and thereby enable the law to communicate more effectively,” the ALRC says. 

The current “dispersal of financial advice provisions” across Chapter 7 of the Corporations Act complicates the task of working out what obligations and prohibitions mean in practice, according to the report. 

The reforms, released for feedback, would also lead to the creation of two chapters containing “generally applicable” financial services provider obligations. 

“These coherently grouped chapters would improve navigability and ease of understanding, particularly for AFS licensees who presently must look across dozens of widely separated provisions of Chapter 7 of the Corporations Act,” it says. 

Principal Legal Officer Christopher Ash and Legal Officer Ellie Filkin say even experts in financial services law have told the ALRC that that they have difficulty navigating Chapter 7 of the Act. 

“Legislation that takes longer to find and understand costs more to comply with,” they say. “Laws that are hard to find, or once found can only be understood with difficulty, are unlikely to achieve their purpose.” 

The ALRC has called for submissions on the proposals by July 26 as it moves towards wrapping up the inquiry. A consolidated final report is due to be delivered to Attorney-General by November 30. 

The third interim report is available here.