Ban on conflicted remuneration (FOFA)
AFSL holders and representatives must not accept conflicted remuneration in connection with retail financial product advice.
Who must comply
AFSL holders and their representatives.
What triggers it
Receiving any benefit in connection with retail advice.
When due
Continuous.
Evidence required
Remuneration register, benefit assessment file notes, alternative remuneration register.
Max penalty
Civil penalties to the maximum financial-services regime
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Sections 963A-963K of the Corporations Act (the 'FOFA' provisions) ban acceptance of commissions, volume-based payments and other benefits likely to influence advice on retail financial products. Limited exceptions for risk insurance (capped LIF commissions), basic banking and general insurance.
Enforced by
Source legislation
Entity types
Topics
Related
- CWLTHReport reportable situations to ASIC within 30 days (RG 78)AFSL/ACL holders must report reportable situations within 30 calendar days of becoming aware.
- CWLTHComply with Design and Distribution Obligations (DDO)Issuers and distributors of retail financial products must have a Target Market Determination (TMD) and distribute consistently with it.
- CWLTHLodge a prospectus for offers requiring disclosureOffers of securities to retail investors require a prospectus or OIS lodged with ASIC.
- CWLTHBest interests duty for financial advisers (s 961B-G)Personal advisers must act in client's best interests + meet related obligations.
- CWLTHRegister a Managed Investment Scheme under Ch 5CSchemes with 20+ retail members must be registered with ASIC as MIS.
- CWLTHDesign and Distribution Obligations (DDO) — RG 274Issuers + distributors of retail financial products bound by DDO from 5 October 2021.
Frequently asked questions
- Who must comply with Ban on conflicted remuneration (FOFA)?
- AFSL holders and their representatives.
- What triggers Ban on conflicted remuneration (FOFA)?
- Receiving any benefit in connection with retail advice.
- When is Ban on conflicted remuneration (FOFA) due?
- Continuous.
- What is the maximum penalty for Ban on conflicted remuneration (FOFA)?
- Civil penalties to the maximum financial-services regime
- What evidence is required for Ban on conflicted remuneration (FOFA)?
- Remuneration register, benefit assessment file notes, alternative remuneration register.
Source: https://www.asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.