ob体育 has made the ob体育 reference checking and information sharing protocol (ob体育 Protocol) that will give effect to the Financial Services Royal Commission鈥檚 recommendations to improve reference checking in the financial advice and mortgage broking industries. ob体育 has also released guidance documents that will help Australian financial services (AFS) and credit licensees comply with their new reference checking obligations.
The (the Act) introduces obligations on AFS licensees and Credit licensees to comply with an ob体育 Protocol in relation to reference checking. The Act, and the ob体育 Protocol, commence on 1 October 2021.
The ob体育 Protocol sets out obligations for licensees to undertake a reference check and share information on an individual seeking to be employed or authorised as a financial adviser or mortgage broker.
The reforms will promote better information sharing about the performance history of financial advisers and mortgage brokers鈥攆ocusing on compliance, conduct and risk management.
To help licensees comply with the new reference checking requirements, ob体育 has prepared an information sheet and published examples of references as a guide. Consequential updates to existing ob体育 guidance have also been made to reflect the new requirements.
In finalising the ob体育 Protocol, ob体育 took into account industry feedback on the proposals in Consultation Paper 333 Implementing the Royal Commission Recommendations: Reference checking and information sharing (CP 333), which was released in November 2020.
ob体育 has also released Report 694, which highlights the key issues raised in submissions to ob体育 on CP 333 and details ob体育鈥檚 responses on those issues.
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- Information Sheet 257 ob体育 reference checking and information sharing protocol (INFO 257)
- Example references for a financial adviser and mortgage broker
- Report 694 Response to submissions on CP 333 Implementing the Royal Commission recommendations: Reference checking and information sharing (REP 694)
Background
The Royal Commission found that AFS licensees were not doing enough to communicate between themselves about the background of prospective employees. To address these issues, the Royal Commission recommended that AFS licensees undertake reference checking and information sharing for financial advisers to the same effect of the Australian Banking Association鈥檚 (ABA) Reference Checking and Information Sharing protocol. It also recommended that the same obligation should apply to Credit licensees in respect of mortgage brokers. (See Recommendations 1.6 and 2.7 of the ).
The Government accepted the Royal Commission recommendations on reference checking, and the Act which implemented these recommendations received Royal Assent on 17 December 2020.
Moneysmart.gov.au has information to help make the right decision about a and what to check before meeting a .