Securities Commission launch QFE adviser business statement guide
18/01/2010
In December, the Securities Commission released the 'QFE Adviser Business Statement Guide'. The guide is useful for businesses looking to become qualifying financial entities (QFEs) and provides a framework for developing an adviser business statement, which a QFE will need on an ongoing basis.
Adviser business statements (ABS) are not unique to QFEs, as authorised financial advisers will also have to prepare an ABS (the ABS guide for advisers is scheduled to launch in the first quarter of 2010), but this guide is solely for entities so they can understand what they need to do and interestingly - the bar looks pretty high!
There’s been a lot of speculation that big organisations will have it easier, but by looking at the guide it’s clear that this is not the case. The Securities Commission talks a lot about ‘regulatory neutrality’ therefore larger organisations are not going to get an easier path.
The bar is also set high for organisations looking to become a QFE. They would need to demonstrate that they can take on frontline compliance responsibility, which means essentially they need to have governance and compliance arrangements in place, systems and procedures and supervision arrangements. Of note, just having these procedures in place does not guarantee QFE status, but organisations both big and small will have to demonstrate how robust these procedures are. One could argue that a smaller business with only a few advisers doesn’t really drive the need for having big complex systems in place.
Although the guide was developed for QFEs, it provides a good starting point for advisers who want to become authorised in creating their own ABS. To access the QFE adviser business statement guide, click here