Are all Financial Services Council’s Standards relevant to all Financial Services Council’s Full Member companies?
All Financial Services Council’s Full Member companies must adhere to the Standards that are relevent to their businesses. There are cases where some Standards might not be relevent for some businesses, for example Standard no.11 – Genetic Testing Policy is not relevent for those companies not manufacturing or selling life insurance policies.
Regardless of their business type or products they offer, all Financial Services Council’s Full Member companies must confirm compliance with Standard no.1 – Industry Code of Ethics & Code of Conduct.
How are Financial Services Council’s Standards developed?
A new Standard or Guidance Note is usually developed in response to an industry issue or regulatory changes. Having consulted with Members and investigated the need for a Standard or a Guidance Note, the secretariat puts a case to the relevent Financial Services Council Board Committee. The Board Committee then directs Financial Services Council and a Working Group in the development of a draft.
The relevant Board Committee will hear reports from that Working Group while the draft is being developed. Once completed to the satisfaction of the Board Committee and the Working Group, the draft will be circulated to all Financial Services Council Member companies as an Exposure Draft. Comments go back to the Working Group for resolution and the draft is finalised before going back to the relevant Board Committee for endorsement. Once endorsed as final by the Board Committee, the Standard goes to the Standards Oversight and Disciplinary Committee for final approval. They then submit a report for resolution by the Financial Services Council Board.
The time taken for a Standard or a Guidance Note to be developed can take from three months to over a year. The process for the development and maintenance of the Standards and Guidance Notes is detailed specifically in Appendix A of Standard no.1 – Industry Code of Ethics, Code of Conduct.
How are Financial Services Council’s Standards maintained?
The Standards and Guidance Notes are monitored by the Senior Policy Manager responsible to the relevant Board Committee. They will respond to Member enquiries, undertake periodic reviews and report directly to their Board Committee. If the Senior Policy Manager believes that any material changes are required to the Standards or Guidance Notes for which they are responsible, the changes must go through the same process as outlined above for a New Standard or Guidance Note.
Who oversees Financial Services Council’s Standards?
On a day to day basis each of Financial Services Council’s Standards and Guidance Notes are overseen by the Senior Policy Manager responsible to the relevant Board Committee, under which the Standard or Guidance Note sits. Collectively, Financial Services Council’s Standards and Guidance Notes are overseen by the Standards Oversight and Disciplinary Committee and the Financial Services Council Board.
What is the Standards Oversight and Disciplinary Committee (SODC) and who sits on the Committee?
The Committee comprises three members of the Financial Services Council Board. The current Chair is Robin Burns, Managing DIrector of Equity Trustees Limited. Also on the Committee are David Bryant, Chief Executive Officer of Australian Unity Funds Management Limited and Andrew Hagger, Group Executive - NAB Wealth & CEO MLC Limited. The Committee’s role, as per its Charter, is to:
- Oversee Financial Services Council Standard no.1 – Industry Code of Ethics, Code of Conduct;
- Hear updates from the Secretariat on proposals for the development of new Standards and revisions to existing Standards;
(The direct management of this will remain with the relevent Board Committee with only the most complex and difficult issues being escalated to the SODC for input, referring back to the relevent Board Committee to be finalised).
- Provide the final approval for draft Standards or Guidance Notes and revisions to existing Standards or Guidance Notes;
- Hear and assess any complaints against Financial Services Council Member companies, expediting disciplinary action if required;
- Hear and assess issues of non compliance with Financial Services Council’s Standards; and
- Oversee the annual compliance process as managed by the Secretariat and provide a report for publication.
How do I make an enquiry relating to a specific Standard or Guidance Note?
All enquiries should be sent in writing to – email@example.com.
Enquiries are logged and forwarded to the appropriate Senior Policy Manager or General Counsel. We will generally acknowledge receipt of your enquiry within two business days. We will then consider your query and respond as soon as possible with a substantive response to your query. FSC monitors queries it receives in relation to Standards and Guidance Notes as to whether they indicate that a review of the Standard or Guidance Note is appropriate.
How do you know that Members are complying with Financial Services Council’s Standards?
Between July and September every year, the Boards of Full Member companies are required to adopt a resolution stating:
- that they are satisfied they have complied with the Financial Services Council Standards for the previous year;
- where they have not complied they must state the exemptions that have been granted by Financial Services Council in this regard; and
- which Standards are not applicable to their business.
How do you know if Members are not complying with the Standards?
Member companies include the Standards in their operational processes and controls. Members are therefore well placed to know or undertake reasonable enquiries to ensure that they are complying with the Standards. Where a Member identifies significant practical compliance issues they bring that to the attention of Financial Services Council and the appropriate Financial Services Council Board Committee may use its full discretion to grant exemptions. Member companies also notify Financial Services Council of any minor breaches throughout the year and the relevant Senior Policy Manager assesses the nature of the breach, the remedial action taken, the impact and whether any further action is necessary.
What does Financial Services Council consider to be non-compliance with Financial Services Council’s Standards?
Financial Services Council considers the following actions as examples of non-compliance and will consider disciplinary action against a Member in the following circumstances:
- Failure to provide the annual undertaking sought, or any other undertaking sought in relation to compliance with Financial Services Council’s Standards;
- Providing an undertaking to Financial Services Council which is false;
- Taking action that deliberately or negligently contravenes Financial Services Council’s Standards; and
- Failing to comply with Financial Services Council’s Standard when so directed by Financial Services Council.
Where a Member’s conduct in other respects appears to contravene expected standards of behaviour, Financial Services Council’s Standards and Oversight Disciplinary Committee will be notified and will consider on a case by case basis whether disciplinary action is needed.
What happens when Members don’t comply?
When non-compliance has been identified Financial Services Council will notify the Member within 21 days of the date of identification, detailing the nature of the non-compliance. Financial Services Council will attempt to resolve the issue directly with the Member concerned but if the potential non compliance is an industry-wide issue or highlights a weakness with the Standards, the matter may be referred to the relevent Financial Services Council Board Committee. Where Financial Services Council or the Board Committee fail to resolve the matter, it will be referred to the Standards Oversight and Disciplinary Committee to consider whether disciplinary action is warranted.
Where this results in a recommendation to the Financial Services Council Board to undertake disciplinary action, the Member shall be given notice of a meeting to be held in accordance with Financial Services Council’s Constitution..
What is the disciplinary process?
Where the Financial Services Council Board decides to take disciplinary action, it may take the following forms:
- Either a public or private censuring of the Member concerned; and/or
- suspension or expulsion of membership. There is an appeals process which is detailed in Appendix C of Standard no.1 - Industry Code of Ethics, Code of Conduct.