ASIC shifts evidentiary burden to advice licensees

Advice licensees may already be feeling the impact of ASIC's amended Class Order 14/923 (CO 14/923), which expands the obligations on advice licensees to maintain records. Prior to the release of CO 14/923, the Financial Ombudsman Service (FOS) indicated that where there is uncertainty as to a particular piece of advice, if there are insufficient records to establish the position, it may find in favour of the customer. This shifts the evidentiary burden onto the advice licensee, rather than the complainant.

CO 14/923 may have significant consequences for advice licensees where customers raise disputes. Beyond enhancing their records management and monitoring and ensuring that their authorised representative agreements oblige their representatives to comply with the 7 year retention requirements, licensees may need to reconsider their enforcement strategies. A lack of records may incentivise licensees to settle complaints at the internal dispute resolution stage, as it appears that FOS may favour the customer in circumstances where the licensee does not hold adequate records. This reflects ASIC's intentions in Regulatory Guide 256 (which requires a customer's version of events to be preferred in the absence of documents in the context of remediation) and highlights the rising impact of "soft law". However, it remains to be seen whether the courts will take a similarly strict approach to records management.

ASIC have amended CO 14/923 to clarify that:

  • Advice licensees must ensure not only that client records are kept, but also that they continue to have access to these records during the required retention period (generally 7 years).
  • Advice licensees will need to assess their ability to satisfactorily access client records during the period they are required to be retained—even if the records are retained by another person, and even if that person is no longer authorised by, or related to, the advice licensee.
  • Authorised representatives who are advisers must keep records in relation to the advice they provide to clients, and to give these records to the advice licensee if the licensee requests the records.

    In order to facilitate process change, ASIC will provide advice licensees with a grace period of 6 months where they must make a good faith attempt to fully comply with the obligations under CO14/923. The compliance period will end on 26 April 2017. However, it appears that licensees may already be feeling the additional burden.

Scott Atkins

I'm unapologetically determined and fearless. I pursue excellence. Always.

Scott Atkins Partner

Scott is the Chair of our Board and an internationally renowned insolvency and restructuring lawyer. He is an inaugural Fellow and a member of the Board of INSOL International. Scott is also Vice President of the Australian Restructuring Insolvency and Turnaround Association (ARITA).

Scott is a trusted adviser to Australia's leading banks and insolvency and restructuring practitioners and has acted on some of the industry's most complex and sensitive banking and insolvency advisory and dispute resolution matters.

Prior to joining HDY, Scott practiced for 7 years as in-house counsel with Commonwealth Bank Group. He is now our Client Relationship Partner for the CBA Group. He is also the co-leader of our cross-border insolvency practice and our regulatory enforcement practice. Scott is recognised by his peers for his leading expertise in cross-border insolvency, acting on both inbound engagements in Australia and advising Australian clients on outbound engagements in the USA, UK, Cayman Islands, Hong Kong and The Netherlands, among other jurisdictions.

Scott was the Australian delegate on the Advisory Committee on Comparative Law established by the American Bankruptcy Institute as part of its Commission to Study the Reform of Chapter 11 of the US Bankruptcy Code. This resulted in a landmark report for the reform of Chapter 11.

He is a published author on insolvency and cross-border insolvency. Most recently, Scott was one of the Australian contributors to the 2015 publication 'International Contributions to the reform of Chapter 11 U.S. bankruptcy code' which is volume 2 of the European and International Insolvency Law Studies series. He also authored the Australian chapter of Avoidance of Antecedent Transactions and Cross-Border Insolvency (INSOL International). Among other publications, he is the co-author, together with Professor Rosalind Mason, of the Australian chapter of Look Chan Ho's leading text: Cross-Border Insolvency: Cases and Materials (Kluwer International).

Scott is a visiting lecturer on cross-border insolvency at the University of Sydney in its undergraduate and postgraduate law programs lead by Professor John Stumbles.

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Nikki Bentley

I understand the financial services industry and thrive on helping our clients in this industry succeed.

Nikki Bentley Partner

Nikki is the Group Leader of Henry Davis York's Corporate Group, which includes the legal teams for Corporate / Mergers & Acquisitions; Investments & Financial Services and Tax.

Nikki is a leading investment funds advisor specialising in financial services and corporate law.  She specialises in business establishment and structuring, fund establishment, funds merger and acquisition, product disclosure and distribution. Nikki leads HDY's corporate group which combines expertise from the Financial Services, M&A and Tax areas.

Nikki provides advice to leading Australian and global fund managers on a full range of corporate, commercial and regulatory issues facing their businesses. She has considerable experience in assisting clients with fund establishment (onshore and offshore), disclosure and distribution. Nikki regularly advises clients on establishing, buying, selling and restructuring their businesses. She also regularly assists clients responding to regulatory enquiries and investigations.

With more than 15 years funds management experience in private practice, government and as an in-house lawyer, Nikki's practice spans the range of funds management products, with particular expertise in hedge funds, property funds and equities.

Nikki is regularly involved in industry and government discussions on regulatory reforms impacting the Australian funds management industry. Nikki is a passionate advocate for the development of a new corporate collective investment vehicle because of the opportunities it could provide to grow the funds management industry. She is the Honorary Legal Counsel and Chair of the Regulatory Committee for the Australian branch of the Alternative Investment Management Association (AIMA) and is a regular participant on the Financial Services Council (FSC) working groups.

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John Martin Partner

John is a leading lawyer in both financial sector dispute resolution (complex and regulatory) and corporate insolvency and restructuring, with a particular specialty in cross-border insolvencies. He is recognised by his clients, peers and legal directories as a leader in his field.
 

Domestically, John advises on large and complex insolvencies and assists in finding solutions for financial institutions with regulatory and other complex issues. His clients include several of Australia's major banks, as well as insolvency practitioners appointed to insolvent entities.

Internationally, John has advised in connection with insolvencies in England, Fiji, Bermuda, Cambodia, Cayman Islands, Brunei, and Norfolk Island. His cross-border experience includes acting for the liquidators of an insolvent bank, and various liquidators of insurance and reinsurance companies.

John is a recognised authority on insolvency issues, with articles published in media outlets such as The Australian Financial Review and the Insolvency Law Journal. He has presented at numerous domestic conferences as well as internationally in the US, England, South Africa, Singapore, Canada, New Zealand, and the Netherlands.

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Anna Simmons

I deeply understand my client's business so I can offer insight and innovative solutions to achieve outcomes that count.

Anna Simmons Senior Associate

Anna is a restructuring and insolvency lawyer specialising in insolvency advice, dispute resolution and financial regulation.

Anna's clients include banks and insolvency practitioners. She advises these clients on dispute resolution, regulatory compliance, enforcement strategies, receiverships, and liquidations.

Anna has extensive experience in advising on various aspects of debt recovery, insolvency and bankruptcy, creditors' remedies, general banking litigation, fraud disputes, misleading and deceptive conduct claims (including valuer negligence) and other forms of dispute resolution. She has worked on a large-scale remediation program, with a focus on regulator engagement.

Anna also presents and writes on insolvency, litigation and recovery matters.

As part of HDY's Pro Bono program, Anna volunteers at Redfern Legal Centre and MOSAIC, a specialist legal service that provides free legal advice to asylum seekers, refugees and newly arrived migrants. Anna is a member of HDYPride, the firm's LGBTIQ support network.

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Claudine Salameh Partner

Claudine has over 15 years' experience dealing with legal issues in the financial services sector.

She is a banking and insolvency litigator and regulatory expert. She acts for the major Australian financial institutions in matters involving customer disputes and litigation, fraud, regulatory and compliance issues, regulatory investigations, inquiries and enforcement matters, security enforcement and insolvency litigation. She also acts for insolvency practitioners in formal receiverships, voluntary administrations and liquidations.

Claudine is well known for her ability to manage risks posed by litigation and regulatory inquiries and investigations. She is particularly attuned to reputational and business risks. She is highly strategic and creative and is recognised by her clients for being able to achieve the perfect balance between legal arguments and commercial and practical outcomes.

Claudine has been instrumental in working with clients to provide insights into the field of behavioural economics, which over the past few years, has been of interest to policy makers and regulators as a tool to engage in 'choice architecture'. On a practical level, Claudine has worked closely with clients to design approaches to customer engagement that make use of behavioural insights.   

Claudine is an expert in the conduct of review and remediation programs and provided assistance to the regulator, by way of submissions and her involvement in an industry working group, on ASIC's regulatory guide on review and remediation programs.

Claudine is very familiar with ASIC's powers to obtain documents and information from financial institutions and is called upon by financial institutions to provide assistance in these matters. She has a style that is conducive to having a fruitful dialogue with both the regulator and the various stakeholders within a financial institution.

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James Higby

By collectively striving for excellence, we can achieve outstanding results for our clients and our Firm.

James Higby Senior Associate

James has extensive experience in commercial litigation, with a focus on corporate and regulatory investigations and disputes, financial services, technology, insolvency and trade practices.

James' focus is on commercial litigation including claims concerning allegations of inappropriate financial advice, shareholder disputes, directors and officers' duties, professional negligence, and corporate & regulatory investigations, acting for and against the regulator.

James has a keen interest in disputes arising from new technology, especially in the fintech area. He provides commercially focussed solutions to a range of clients in the financial services, government and private sectors.

James acts for listed and unlisted entities as well as major national and international financial institutions in a wide variety of proceedings in the Supreme Courts of New South Wales, Queensland and Victoria, the Federal Court of Australia and before the Financial Ombudsman Service. James is also experienced in government commissions and inquiries.

James has particular experience in relation to large-scale, high-value litigation, regularly acting for large institutions, their directors, officers or shareholders in all litigious matters including contractual disputes, tortious claims, trade practices proceedings, shareholder oppression suits and regulatory investigations.

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Victoria Taylor Senior Associate

Victoria specialises in complex corporate insolvency and banking dispute resolution for a range of clients including Australia's major banks and other leading financial institutions.

Victoria acts for the major banks as well as insolvency practitioners, distressed companies, creditors and professional trustees in relation to all aspects of corporate insolvency, general banking litigation and financial regulation.

Since joining HDY, Victoria has advised on high profile banking litigation and complex cross border recoveries.

She previously worked in London, where she spent a number of years specialising in commercial and insolvency related litigation and restructuring.

Victoria was recently an Australian contributor for the published text: International Contributions to the Reform of Chapter 11 U.S. Bankruptcy Code (Eleven Publishing).

Victoria is currently working as Senior Counsel on a large-scale remediation program for one of Australia's leading banks.

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