Edition 69, July 2009

Consultation on training for margin lending

The Australian Securities and Investment Commission (ASIC) is seeking public comment regarding the training requirements and financial requirements for firms that offer or advise on margin lending facilities.

Under legislation recently introduced into the Australian Parliament, margin lending will be regulated as a financial product and supervised by ASIC.

ASIC has today released two policy proposals, Consultation Paper 108 Margin lending: training of financial advisers and Consultation Paper 109 Margin lending: Financial requirements, which outline how ASIC proposes to:

  • apply training requirements to financial product advisers who advise on margin lending facilities
  • apply the financial resource requirements to Australian financial services (AFS) licensees who provide financial services in relation to margin lending facility products.

The Consultation Paper 108 proposes that margin lending facilities be categorised as Tier 1 products under the Regulatory Guide 146 Licensing: Training of financial product advisers. This will mean that advisers who advise on margin lending facilities will need to meet the Tier 1-level training requirements, which is equivalent to the Diploma level under the Australian Qualifications Framework.

ASIC is proposing that advisers be required to complete the training requirements within 12 months from the commencement date of the new legislation.

ASIC reminds current holders of an Australian financial services licence that they will need to apply for a variation to their existing licence if they intend to provide a financial service in relation to a margin lending facility.

The consultation papers seek the views of stakeholders, including financial product advisers, training course providers, issuers of margin lending facilities, industry and consumer associations, investors and shareholders and their professional advisers.

Submissions on the proposals contained in the Consultation Papers close on Monday 10 August 2009. Details on how to make a submission are contained in the Consultation Papers.

For more information visit the ASIC website.

This page was generated on 10 December, 2009

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