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
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 obligations
- CWLTHComply with AFSL general obligations (s 912A)AFSL holders must do all things necessary to ensure financial services are provided efficiently, honestly and fairly.
- 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.
- CWLTHMaintain adequate PI insurance (AFSL holders, RG 126)AFSL holders providing financial services to retail clients must hold adequate professional indemnity insurance.
- CWLTHMaintain AFCA membership (mandatory external dispute resolution)AFSL + ACL holders must be members of AFCA — sole AU EDR scheme.
- CWLTHRegister a Managed Investment Scheme under Ch 5CSchemes with 20+ retail members must be registered with ASIC as MIS.
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://asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/conflicted-and-other-banned-remuneration/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.