New guide for QFE applications

The Securities Commission has recently released a QFE Adviser Business Statement Guide to assist entities who wish to become Qualifying Financial Entities (QFEs). 

An Adviser Business Statement (ABS) is a two part document outlining the QFE’s business structure and its compliance and governance practices.  It must be submitted to the Securities Commission as part of the application for QFE status, any time from now until 30 July 2010.

An ABS is intended to be a “living document” for ongoing use by a QFE, as well as the Securities Commission’s key source of information in a QFE application.  The form, length and complexity of the ABS are flexible, and it can cross-refer to separate policy and procedure manuals.

The guide contains lists of expected information and suggested information for ABSs, as well as a number of QFE compliance principles and guidelines on how to address those principles.  An ABS must have two distinct parts:

  • Part 1, a high level overview of the entity, which should describe the entity’s organisational culture, including its structure, products and services, customer type, advisers and the delivery channels for its products and services, and

  • Part 2, which should describe the entity’s conduct and compliance requirements and its approach to professionalism, and compare its practices to the requirements in the AFA Code of Professional Conduct with explanations for any departures from the Code.  The Financial Advisers Act allows QFEs to set their own standards of adviser conduct and competence, but the Commission intends to use the Code as a benchmark to promote regulatory neutrality between QFE advisers and non-QFE advisers.

QFEs can elect to make their ABSs public but this will not be a requirement. 

For further advice, please contact any of the lawyers featured.

Our thanks to Pippa Tasker, Solicitor, for writing this article.

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