Money laundering legislation imminent
The Financial Planning Association (FPA) has told financial advisers not to be afraid of possible costs to their business that will be imposed when the Government releases its long awaited anti-money laundering legislation.
Release of the legislation is now imminent with representatives of the financial services industry and the Federal Government agreeing on the high level principles of any new rules at a meeting in Canberra late last week.
“I wouldn’t say planners should be afraid, but we certainly want financial planners, in particular FPA members, to be interested in the issue and provide us with feedback,” said FPA manager policy and government relations, John Anning.
“We’ll be responding to the draft legislation and it will be crucial that we have member input so we do get a regime that is workable and which produces the minimum requirements necessary to prevent money laundering.”
Last week’s meeting was the fourth and final industry round table on anti-money laundering hosted by the Minister for Justice and Customs Senator Chris Ellison.
However, only the high level principles of any future legislation were agreed upon with the Government at the meeting, which was attended by financial services industry representatives including the FPA, the Investment and Financial Services Association and the Australian Bankers Association.
“There’s going to be the legislation and underneath that legislation there’s going to be regulations and rules and underneath them there’s going to guidelines for industry,” Anning said.
“So there’s been agreement for the principles, but rules and guidelines are going to be subject to fairly intense consultation.”
Both Anning and the Minister’s office could not say when any draft legislation would be released, but Anning did indicate that all were “keen to get the regime in place as soon as possible”.
So far it has been agreed that any new requirements will be technology neutral, so smaller businesses will not have to make expensive upgrades to their systems to comply.
“There will be options available according to the scale of a business,” said Anning.
Anning also cleaned up recent confusion over whether clients who had already taken out a bank account would have to be identified again under the new rules.
Even though the Minister said at the first roundtable in July that it was agreed such customers, who are already identified under the Financial Transactions Reporting Act, would not have to be re-identified, Anning said that there was the possibility that high risk clients might still have to be re-identified, pending further discussions.
He said the FPA was currently engaging in an education campaign to inform members and encourage them to state their views.
“A lot of financial planners feel that they shouldn’t have to be governed by any new anti-money laundering regime because their’s just aren’t the type of clients to do that sort of thing.
“But the potential for money laundering is there, and they’re going to be under the regime whether their customers are laundering money or not.”