Comply with Financial Services Regulation and Industry Codes of Practice

This document provides an overview of the compliance requirements for financial service providers. It covers topics such as disclosure criteria, duty of care principles, general obligations, agency agreements, and relevant regulations. Students can find study material and solved assignments on Desklib for further understanding.

FNSFMK505 COMPLY
WITH FINANCIAL
SERVICES REGULATION
AND INDUSTRY CODES
OF PRACTICE
Table of Contents

Written activity......................................................................................................................................3
Question 1.........................................................................................................................................3
Question 2.........................................................................................................................................3
Question 3.........................................................................................................................................3
Question 4.........................................................................................................................................4
Question 5.........................................................................................................................................5
Question 6.........................................................................................................................................5
Question 7.........................................................................................................................................6
Question 8.........................................................................................................................................6
Question 9.........................................................................................................................................7
10. Fiduciary duties...........................................................................................................................8
11 Contract law principles.................................................................................................................9
12. Internal monitoring and audit process..........................................................................................9
Third party report activity......................................................................................................................9
1. Accessing accurately interpreting and complying with relevant industry codes of practices and
relevant regulations............................................................................................................................9
2. changes and implications of regulations to clients and colleagues.............................................9
3 Record statutory records in timely manner...................................................................................10
4 Office equipment, technology, software and consumables...........................................................10
5. Financial services legislative and industry code of practice information.....................................10
6 Organisational requirements of regulatory obligations.................................................................11
7 Changes to regulations..................................................................................................................11
8) Comply any professional codes...................................................................................................12
Research questions..........................................................................................................................12
REFERENCES....................................................................................................................................14

Written activity
Question 1
Disclosure of capacity criteria
Every financial service provider company’s have to disclose their capacity criteria
related to the services they are able to provide to their clients. For this, the financial
consultancy has to look over their services such as the service related to debt, equity and etc.
It is because the clients have to take proper decision regarding their finances. Any wrong
advices by the financial service provider may lead to heavy loss to the clients. Outline the
criteria will help the financial service to carry out their duties in a proper, efficient, honest
and fair manner. The disclosure of the capacity also includes the education and experiences
of each agent and officer working in financial consultancy company along with the CSR
practices (Fauziah, Sukoharsono and Saraswati, 2020).
Question 2
Duty of care Principles
In a tort law, this is a legal obligation in which financial service provider organization
need to follow all the duty of care principles in order to act in the best interest of themselves
and others. This principle state that the business has to provide safe business environment to
their workforce so that no individual get harm from abuses of other staffs. The duty of care is
a principle in which any individual at the workplace harm their employees not physically but
mentally are liable for the prisoner and penalty for such an action. Basically, this is the first
element that has been established by the Australian High Court deviated from the British
Approach to provide safe and secure workplace to the public of that country. The duty of care
is basically assigned to all the people not a single people in order to make sure that their
workplace is safe. For example, in financial consultancy company if any manager bullies
their subordinate and assistant that its everyone duty that they save that assistant by raising
their voice against manager (Armenes and et.al., 2018).
Question 3
General obligation of a financial service officer

The Australian financial service officer and licensee have a general obligation that
they need to follow in order to provide the honest, fair and efficient financial service to their
clients. This obligation includes:
 They have to conduct their activity as per the financial advisory standards and
disclose all this standards and provision of financial service within their financial
reports.
 They have to provide proper training to their financial advisers and authorized
representatives.
 The obligation also includes compliances of risk management within financial
services and also managing the conflicts of interest of staffs and clients.
 They also need to ensure that their employees such as financial advisers and
authorized representatives follow all laws and regulations related to financial services.
 The officer also needs to manage the dispute resolution and compensation
arrangement and also the adequacy of their human, technological and financial
resources.
 The obligation related to competence, knowledge and skills of the organization
responsible managers.
 The officer also needs to manage the implementation and application of risk
management system within the organization to minimize their risk attached with
finances (Brody and et.al., 2017).
Question 4
Law of Principal and Agent
The relation between the principal and agent is covered under the business law is also
known as principal-agent law. Here, the principal is a person that allow the agent with a task
that need to be done on the principal behalf where the financial agent have to follow all the
instruction given by their finance manager. In financial service provider company, the
corporation and officer’s relationship are considered as principal agent law. In this both need
to sign a written agreement with their mutual consent and corporation have to pass
appropriate authority to their officer so that proper financial advice can be given to the client.
The type of authority in this law is of two type and that is actual and apparent authority. The
duty of principal and agent include loyalty towards each other. The agents have to follow all

the standards of the financial consultancy and also owe general duty of loyalty to its
principles. The law also states that in case of any negligence by any of the party the contract
can be breach and terminated (Solis and et.al., 2017).
Question 5
Organization Products and Services
The financial management organization offer the financial advisory service to their
clients so that they can take proper decision regarding where to invest and how must to invest
funds. Here the services provided by the financial advisory includes transaction service, risk
management, tax and real estate advisory etc. In Australian market, the financial advisory
segment is estimated to be worth of $60 billion and being a stable organization even at or
after the crises (Nikiforova, 2017). It is because every business in order to expand their
business and to manage the finances properly needs financial advisory. For example, in
Australia KPMG is a top most financial service provider firm which operates in many
countries to help businesses in taking appropriate financial decisions.
Question 6
Agency agreement and Broker authority
The agency agreement is being created between the principal and agents so that no
dispute and conflicts has been arises between them in future. In this case, the agreement
between the financial service provider company and its officer has been signed which involve
points related to the expectation of the agency agreement, specific services such as
consultancy of the agents, geographical location, payment of amount and terms, Australian
governing law, process of dispute resolution etc. Both the parties need to sign and keep a
copy of agreement form with themselves. A broker is a person that sells the securities of the
company and earn commission in return. The company hire a broker to sell their shares and
debts to the public and financial institution where the authority of the broker is to sell all the
securities, they have taken under them. For example, if a broker takes 500000 shares from the
company in order to sell them but if they sell only 450000 shares so the remaining shares of
50000 must be taken up by the broker only (Yanovitzky and Weber, 2019).

Question 7
Financial code of practice
The code of practice sets the standards of fair industry practices for financial institutions
when dealing with people who may become individual or SME customers in aspects relating
to:
a) Provision of service
b) Professional conduct standards
c) Standards of practice
d) Behaviour which is ethical.
There is a code compliance and monitoring team which is operated separately and Australian
Financial Complaints Authority business unit which is funded.
These authorities support committees which are independent using code relevant to achieve
standards trustworthy. The aim to support the financial services is for strengthening the
relationships with the business customers, improve on handling of complaints, reducing
number of customer dispute with service delivery improvement (Lin and Hu, 2020).
The code of practice deals with sector of banking, insurance, insurance brokers, customer
owned banking committee. For instance, the breach reporting and compliance data constitutes
an important part in banking code systems. The key component in monitoring efforts gets
assistance through banks’ own self-report code breaches to authority through filling of
Banking Code Compliance statement. The info received from Banks over how they breached
the code demonstrated efforts for monitoring compliance and helping identify the emerging
risks and giving guidance on how banks can improve the practices.
Question 8
Relevant regulation related to the financial sector

Financial regulation in Australia has been split in Australian Securities and Investments
Commission and Australian Prudential Regulatory Authority. Australian Security Exchange
has played a main part in regulation of market conduct (Nguyen and Truong, 2017). Talking
of financial services license in Australia Corporations Act 2001 has set up an approach which
is uniform for regulating financial services by licensing which is uniform and disclosure
policy. The regulatory position is that an individual or corporate entity to carry on financial
service in Australia has to be in possession of Australian financial services license which gets
issued by ASIC. The financial service business for which Australian financial service license
is required has inclusion of:
A) Financial product dealing
B) Advice provision
C) Developing a market for financial product
D) Operation of an investment scheme which is managed and registered
E) Depository service being provided in relation to financial products.
Corporation Act defines a clear difference between the provision of products and services to
the clients of retail and wholesale clients. There exist disclosure requirements of financial
services which are provided to retail clients (Lin and Hu, 2020).
Question 9
Statutory records financial services are required to maintain
The books and records a company has to keep is basically a written form of financial records
which can record and give explanation of financial position and the performance and also
enable the financial statements accurately for preparation and auditing. The section 286 of the
Corporations Act has a requirement of financial records which have to be kept for seven
years after the transactions covered by records have been completed. The examples of records
company has to keep are:
A) Financial statements: They include statements like profit and loss, balance sheet,
trading account and returns of taxation.

B) General ledgers and journals: They involve two-sided entry in book of accounts
namely debit and credit. This helps in double entries being posted in an account
getting the money and another account getting expensed (Nguyen and Truong, 2017).
C) Electronic copies of documents: Backing of the critical business documents on
weekly or daily basis is recommended.
D) Cash records: It includes cash receipts, bank deposits records, petty cash books and
cheque books.
E) Bank statements and loan documents
F) Debtor and sales records
G) Statements received and invoices
H) Invoices which are unpaid
I) Register where resolutions are passed by directors or members
J) Relevant registers which include register of members, options, assets and relevant
items.
K) Deeds containing deeds of trust, contracts, agreements, transactions between
companies.
10. Fiduciary duties
Fiduciary duties are the legal obligations financial experts needed to fulfil in against
to deliver the functional responsibilities. In context to the financial consultancy firms the
fiduciary duties are related to the property or the asset that a consultancy firm will try to
handle in against to deliver the professional objectives. In the context to the financial
consultancy the assets of the client or the security contain an obligation related to the
fiduciary duties. This is the responsibility of the firm to provide an appropriate guidance so
that all transaction could have been maintained in the most professional way possible. In
many cases no profit are made from the relationship the stakeholders unless and until the
explicit consent has been granted in the relationship (Knudsen and Moon, 2017). The
fiduciary duties are obligated in the following different ways such as trustee and beneficiary,
corporate broad members and shareholders, executors and legatees, guardians and wards,
promoters and stock subscribers, lawyers and client, investment corporations and investors,
insurance companies agents and policy holders. All these are obligated against the fiduciary
duties.

11 Contract law principles
The contract law is about to formulate laws and legal regulations so that legal
relationships are established between the parties. The principle of contract law is about to
form a legal relationship in between the different parties involve in the contract. Once the
ownership is transferred as per the contract agreement than only the respected party is liable
to clear the due. This is a general principle associated with the contract law (Ducas and
Wilner, 2017). The contract law allow the parties involved in the contract to follow all the
conditions involve with the contract if it is applied on the basis of the self agreement of both
the parties involved in the contract.
12. Internal monitoring and audit process
Internal monitoring is an important part of the financial consultancy services. This is
about to monitor the operations and functions of the business entity. It is essential for the
business operations to precisely convey the internal monitoring practices of the business
entity. The internal monitoring process involves analysing about the significance of the
practices followed (Dikau and Volz, 2021). This is about to measure the significance of the
contract formulated in between the parties involved in the contract. Audit is about to evaluate
the authenticity of documents and practices involve in the contract. This is an important part
of the reporting transactions.
Third party report activity
1. Accessing accurately interpreting and complying with relevant industry codes of
practices and relevant regulations
In respect to the financial services this is important to cope up with the different
industrial code of practices. These are the mandatory requirements related to the financial
services and practices installed by the business entities. Regulatory requirements are
mandatory in nature that needed to ensure the complete fulfilment of the practices (Shanahan,
Jones and McBeth, 2018). The regulations clearly demonstrate This is important to deal with
all code of conducts at the best way possible. The professional code of conducts is the
mandatory requirements that needed to fulfil in any given situation.
2. changes and implications of regulations to clients and colleagues
Changes are always a part of the financial regulations. Regulations are the mandatory
requirements that in any situation needed to fulfil. The contracts ad services are always offer

changes on the basis of the individual needs and requirements of the client and respective
party involve in the contract. On the basis of the time and requirements different changes are
implemented that can offer better financial practices and outcomes to the party. The client
and parties involve in the contract and practices allow the consultancy to implement the
necessary changes that can offer the best level of financial consultancy and outcomes.
3 Record statutory records in timely manner
This is the key guidelines associated with the financial consultancy practice that it
requires to submit the statutory records in a timely manner. The different records such as
related to the ownership, income, contract and many such records required to maintain. This
is essential for the financial consultancy service provider that all these records are the
statutory requirements or guidelines that needed to maintain in any given situation. This is
essential to record all the necessary document so that proper documentation could be done
about the financial consultancy services provided.
4 Office equipment, technology, software and consumables
Office equipment, technology and consumables are the elements or factors that
influence to enhance the overall potential as a financial consultant. All these are the
equipments that allow the professionals to be delivered its practices in the best way possible.
When it comes to providing professional level of consultancy this is important to have a
proper space or the appliances that can favour in achieving all different areas or expertise as a
professional. All these are the needs that needed to fulfil in any given situation as a
professional or the individual consultant.
5. Financial services legislative and industry code of practice information
Financial service legislative are the regulatory requirements that a professional needed
to ensure and fulfil when it comes to addressing the various financial requirements and code
of conducts. The legislations are the guidance that are applicable and needed to fulfil in any
given situation. This is an important part of the legislative requirements that needed to ensure
to be fulfilled in against to deliver the professional level of financial consultancy services
(Kress, 2018). It is important being a professional to ensure all the financial regulatory
requirements that are essential and allow the professional to approach the practice in the most
meaningful manner.

6 Organisational requirements of regulatory obligations
A) Ownership records, bill and payment details, address, identity proof and photo. All
these are the some crucial and the most essential document or records that needed to
access in respect to the financial service assistance.
B) Procedural requirements are related to verifying all the records and documents. All
the documents are required to verify at this level. This is important that the
professional assess the document as to whether they are capable to deal with the
different regulatory requirements.
C) Compliances related to the authorities are very important. This is essential to cope up
with the compliances and its requirements. This is important to take on all the
respective standards set by the professionals or cover up in the duties of the different
authorise. This is certainly related to the verification of documents and such other
elements or factors.
D) Auditing is an important part of the job role. This involve certain task as to verify
authenticity of the different documents that are submitted, verify the individual or
person belong to the submitted document and such other aspects. All these elements
are needed to ensure in case the audit is conducted.
7 Changes to regulations
a) Regulations and code of conducts are the keep changing element or factor. This is
important for the financial consultant to keep on update about all the modifications
has been made in the financial regulations and code of conducts. This can state that it
is essential for the financial consultant to identify all the key regulations and
modifications have been done in the financial regulations. All consultancy are given
on the basis of these modifications have been introduced. In order to ensure the
currency of information regular reviews will be done over the authorise website of the
government.
b) All the information related to modification and changes are available over the official
website of the government body. The website and the government owned platforms
are the only significant basis to verify all the essential information and records (van
Ruth, Huisman and Luning, 2017). This is very essential for the consultant to verify
the information in the best way possible before proceeding further for any
consultancy.

c) The procedural changes are related to the process. These changes are made only when
it is completely essential for the regulatory authority. In case of not any urgency these
changes are not entertained.
d) In order to implement the new procedure a proper team is formed. This team is full of
professionals and experts over the respective topic. This team of professional outline
all the requirements and the ways or the level of changes they convey that are only
essential in nature.
8) Comply any professional codes
There are certain codes such as related to filling documentation, total tenure of
completing the whole process and such related codes require modification. This is essential to
convey all these codes in the best way possible so that best level of controlling could have
been established.
Research questions
1.) Source documents is a document which documents a transaction. At a time, when a
business spends or gains money a source document is created and is used for
accounting records like cancelled cheques, invoice, cash receipts, credit memo for
refund to customer, deposit slips and purchase orders.
2.) Organisational tasks required for legal principles and regulatory requirements is firstly
ensuring compliance being followed in operations of the company, whether it is
account opening or transaction. Apart from this, maintaining an internal audit monthly
for the company shall ensure compliance and also benefit company in aligning with
tax laws.
3.) If changes occur in the legal and regulatory environment, company has to be aware of
the same and implement those changes. Advice has to be taken from consultancy
forms when to incorporate those changes, as it happens that changes announced have
to be implemented from the next financial year or quarter (Brandweiner and Morey,
2017).

4.) Operational review means reviewing the operations in the manner they are conducted.
The benefits are that it can help to assess where the company is lacking in resources
or where the efficiency can be improved. It can help in managing resources optimally
for increasing performance.
5.) Code of practice relevant to the finance industry is following the ethical practices
which provide benefit to the business as well as the customers by meeting the
obligations. In financial terms, they are disclosure of fees and charges, change in
terms and conditions being told before, confidentiality in customer data, contract
agreements in legal terms etc.
6.) Purpose of code of practice is to see that the business is being conducted fairly and
ethical practice is being followed while dealing with customers. It ensures that there is
no misdoing in terms of work of the company and customers gets the value for the
investment done (Brandweiner and Morey, 2017).
7.) Type of records to be maintained in organisation are financial statements which
comes of both internal and external use, journals and ledgers for accounting entries,
transaction invoices, electronic documentation of the manual transaction slips for
further record, register of the meetings conducted of management etc.
8.) ASIC has training courses and individual assessment for financial advisors (Breakey
and Sampford, 2017). These are in relation to improvise knowledge on financial
awareness for facilitating and improving on the performance of financial system. It
shall help in updating the companies with changing financial regulatory requirements
and compliance to be followed hence.

REFERENCES
Books and journals
Armenes, G. A. and et.al., 2018. International Organizations and Alleged Duty of Care
Breaches: A Growing Ethical, Reputational and Financial Challenge. In The Duty of
Care of International Organizations Towards Their Civilian Personnel (pp. 3-28).
TMC Asser Press, The Hague.
Brandweiner, R. and Morey, S., 2017. Implementing ethical culture across the Australian
financial landscape. Journal of Financial Compliance. 1(1). pp.56-63.
Breakey, H. and Sampford, C., 2017. National exams as a tool for improving standards: can
Australian financial advisers take a leaf from the professionals' book. UNSWLJ.40.
p.385.
Brody, M. and et.al., 2017. Three financial regulators issue reports on product and service
innovations. Journal of Investment Compliance.
Dikau, S. and Volz, U., 2021. Central bank mandates, sustainability objectives and the
promotion of green finance. Ecological Economics. 184. p.107022.

Ducas, E. and Wilner, A., 2017. The security and financial implications of blockchain
technologies: Regulating emerging technologies in Canada. International
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Fauziah, D. A., Sukoharsono, E. G. and Saraswati, E., 2020. Corporate social responsibility
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Research in Business and Social Science (2147-4478). 9(7). pp.75-83.
Knudsen, J. S. and Moon, J., 2017. Visible hands: Government regulation and international
business responsibility. Cambridge University Press.
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crisis. BCL Rev. 59. p.877.
Lin, N. and Hu, W., 2020. Systemic Issue Resolution in Two Dimensions: A Reflection
Based on a Ten-Year Review of the Australian Financial Ombudsman Service. Harv.
Negot. L. Rev..26. p.113.
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and investment efficiency: a pitch. Accounting Research Journal.
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van Ruth, S. M., Huisman, W. and Luning, P. A., 2017. Food fraud vulnerability and its key
factors. Trends in Food Science & Technology. 67. pp.70-75.
Yanovitzky, I. and Weber, M. S., 2019. News media as knowledge brokers in public
policymaking processes. Communication Theory. 29(2). pp.191-212.