Know Your Obligations As A Responsible Officer
In order to hold an Australian Financial Services licence, an organisation is required by ASIC to nominate a Responsible Officer. This is the person who is responsible for your organisational competence.
If you have been nominated by your company, or you are a sole operator, in which case you are the Responsible Officer, do you know your obligations under the Corporations Act 2001 and AFS licence conditions?
If not, here is a brief summary of what being a Responsible Officer entails. For more detailed information, it would be a good idea to undertake compliance training on this subject as part of a learning management system .
To qualify as a Responsible Officer, you need to:
Understanding the General Insurance Code of Practice
If you’re in the general insurance industry, you are probably already part of the 90% who are signatories to the General Insurance Code of Practice, A voluntary code developed by the Insurance Council of Australia, it seeks to raise standards of customer service and provide protection for policyholders.
One of the requirements of the code is that all employees know their obligations and are trained in the latest procedures. If your organisation doesn’t currently have training in place, you would be wise to institute it as part of a learning management system .
The first General Insurance Code of Practice was created in 1995 and was updated in 2005. The new code includes benchmarks relating to claims and complaints procedures and the provision of consumer information.
The code does not apply to:
Debt Collectors: Do You Know Your Legal Obligations?
Debt collectors have a range of obligations under the Competition and Consumer Act, the Australian Securities and Investments Commission Act, and the Office of Fair Trading in each Australian state or territory.
ASIC and the ACCC are the regulatory bodies that monitor the debt collection industry and ensure that debt collectors are complying with the law.
So how do you make sure you are compliant? One way is to ensure your employees or agents receive compliance training on a regular basis. There are plenty of good training providers out there offering a variety of different delivery methods; the most popular being online courses.
In general terms, to remain compliant, debt collectors must follow the guidelines set out by the ACCC and ASIC. These guidelines apply to debt collectors, collection agencies, corporate in-house collection departments and government bodies using outside collection agencies.
In brief, the guidelines are as follows. As the creditor or debt recovery agent, you:
Is Your Organisation Complying With The UCCC?
If you’re in the business of lending money for personal use, then you have a range of obligations under the Uniform Consumer Credit Code.
The UCCC is a national initiative to standardise credit practices in all states and territories of Australia. Its aim is to provide borrowers with rights and protection, both when a loan is applied for and during the term of the loan.
As a lender, you probably know all this, but can you confidently say the same thing about your staff?
Failure to comply with the Uniform Consumer Credit Code can result in criminal charges and fines of up to $10 million for companies, so if you haven’t undertaken compliance training for all employees, it would certainly be beneficial for you to do so.
Your employees need to be familiar with all provisions of the Uniform Consumer Credit Code, including:
Financial Services Compliance: The Rules Are Changing
As with most professions these days, financial advisers are subject to a number of regulations and standards put in place by governments to protect consumers and investors.
Financial advice is a very personal affair, requiring intimate knowledge of a customer’s finances and having a direct impact on that person’s financial future.
Whatever kind of advice you provide, from investments to superannuation. There is a requirement to comply with a range of legislation when offering advice, including legislation under the Privacy Act, Fair Trading, Contract Law and so on.
The Australian Securities and Investments Commission (ASIC) is the chief regulatory body, which can and often does conduct audits of financial advisers to ensure compliance under the Corporations Act.
Anti-Money Laundering Legislation: Is Your Business Compliant?
The International Monetary Fund was quoted as saying that between two and five per cent of the world’s economy is made up of laundered money. It is now thought to be more than one and a half trillion dollars a year; four and a half billion of which is laundered in Australia alone.
That’s a lot of laundry, which is why there is now a lot of legislation aimed at trying to detect and prevent money laundering activities in Australia and around the world.
Laundered money is used to fund criminal and terrorist activities and not only fuels corruption, but has the potential to undermine national economies.
The three main stages of money laundering are:
- Placement (illegal funds enter the financial system)
- Layering (the funds are moved, spread out or disguised)
- Integration (the funds are reintroduced as legitimate funds).
GST: The Tax Man Cometh
The Australian Taxation Office received an extra $445 million in the 2010 Federal Budget. Why should that concern you? Because they are using those funds to attempt to recover more than $3 billion in lost GST revenue from Australian businesses.
Among other things, the ATO is targeting overdue Business Activity Statements, under-reporting of GST liabilities, non-payment of GST debts and fraudulent tax returns, with businesses large and small being firmly in their sights.
If your business is not GST compliant or your staff aren’t up to speed with GST requirements, now’s the time to do something about it. Some form of compliance training would be highly advisable, before the tax man comes knocking at your door.
According to the ATO, some of the most common mistakes made by businesses in relation to GST are:
- misinterpreting the GST legislation
- incorrectly claiming GST credits
- claiming them without valid tax invoices
- Not completing BAS reconciliations.
Contract Management: Are Your Contracts Compliant?
A contract is a legally binding agreement entered into by two or more parties, which contains three basic components:
- Agreement (offer and acceptance)
- Consideration (exchange of goods or services)
- Intention (agreement to be legally bound).
Businesses enter into a variety of contracts all the time with suppliers, customers, insurers, landlords, financiers, partners, employees and so on.
Some of the legislation which you need to be aware of and to abide by when entering into contracts includes:
Bribery and Corruption: The Lessons of the Siemens Scandal
The opportunities for companies doing business abroad can be immense, but so can the pitfalls, as evidenced by the Siemens scandal, which rocked the business world to its foundations in 2006.
A number of employees of electrical engineering giant Siemens were found guilty of bribing foreign officials to gain lucrative overseas contracts.
The money was accounted for by Siemens as having been paid to foreign consultants (some 420 million pounds between 1999 and 2006), but was actually paid to foreign purchasing officials.
These cash payments included bribes for contracts at power stations in Israel, the UN’s Oil For Food program, the Iraqi government, traffic control systems in Russia and contracts for the 2004 Athens Olympics in Greece.
The scandal cost Siemens over 1 and a half billion dollars in fines and has done immense damage to its reputation.
So why did such a huge company pursue such a course of action and on such a scale?
Are You An Equal Opportunity Employer?
Equal opportunity is now a business buzz word. This is largely due to the growing number of harassment and discrimination cases being brought before the courts.
It’s also due to the fact that it’s the employers, not the perpetrators who are receiving the fines, because equal opportunity legislation puts the onus of responsibility squarely on your shoulders.
If a complaint of unlawful conduct is made against one of your employees and you have not taken what are considered to be reasonable steps to prevent such conduct occurring, the damages will most likely be awarded against you, not your employee.
So what can you do to minimise your risk? Compliance training is a good step in the right direction. It will help you pinpoint areas that may need addressing in your workplace culture and will ensure your staff are aware of what is considered appropriate workplace behaviour.