Is your practice in breach of MDA regulatory requirements?
In September 2016 ASIC gave notice of revised AFS license requirements. In the recent ASIC media release on 1st October 2018, it stated that financial advisers that relied on ASIC’s no action position for MDAs operated on a regulated platform had two years to transition to the revised requirements and either obtain the necessary AFS licence authorisation or cease their MDA activities.
The misconception many financial advisers have is that these changes don’t affect them or it’s a “grey area”, as they recommend SMA’s or IMA’s for their clients. It’s not grey. It’s black and white. Both SMA’s and IMA’s come under MDA authorisation.
“An MDA is a facility where client portfolio assets are managed on an individual basis by an MDA provider at the MDA provider's discretion (subject to any limitation agreed with the client). MDAs are often used by financial advisers and varying terminology is used to refer to these products, such as separately managed accounts, individually managed accounts, investment advisory programs or managed discretionary portfolio services.” ASIC 18-292MR
If you have not applied for MDA authorisation on your AFSL and are recommending or dealing in MDA’s, IMA’s or SMA’s whether they are via a platform or not you are in breach of ASIC’s MDA regulations.
Latest Blog
Leave a Comment
Your email address will not be published