In a joint submission to the parliamentary joint committee (PJC) inquiry into the amendments to TASA, CPA Australia and the Institute of Chartered Accountants of Australia said it is “not unusual for an industry to be regulated under two or more separate regimes”.
“While some stakeholders have expressed concern over interaction between the Tax Agent Services Regime and the FOFA reforms, we believe the issues identified can be appropriately addressed,” said the submission.
The accounting bodies pointed to a meeting between industry representatives and the Australian Securities and Investments Commission (ASIC) in May, during which the regulator said it was confident the Corporations Act 2001 (as amended by FOFA) was consistent with TASA.
“ASIC also confirmed a licensed financial planner could satisfy the requirements of the best interests duty, including the safe harbour provisions (including s961B(2)(d)), even if the individual is not a registered tax (financial) adviser but rather operates under the ‘sufficient numbers’ model,” said the submission.
The TASA Bill provides the industry with the option of licensee registration, so that licensees can implement a supervisory model (rather than having to register every single advice provider).
As part of the Bill, a licensee must satisfy the Tax Practitioners Board that they have a sufficient number of individuals who are registered as either tax advisers or tax agents.
In its submission, the Financial Services Council (FSC) argued that a supervisory model would not be consistent with the FOFA best interest duty
The Financial Planning Association (FPA) submission to the PJC requested guidance from ASIC on the interplay between the FOFA best interest ‘safe harbour’ and TASA.
Both the FPA and the FSC recommended that the relevant regulatory guides be amended as follows:
- ASIC RG175.298: “With regards to tax (financial) advice services, an individual advice provider need not be registered with the Tax Practitioners Board to demonstrate expertise but may provide tax advice under the supervision of a registered tax (financial) advice services entity”
- ASIC RG175.301: “(d) an individual advice provider need not have the expertise in the provision of tax (financial) advice services as demonstrated by registration with the Tax Practitioners Board provided the individual advice provider is working supervised by a registered tax (financial) advice services entity”
