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Financial Services Reform ActUnder the Commonwealth’s Financial Services Reform Act (FSRA) 2001, all companies or individuals that provide a financial service must either hold an Australian Financial Services License (AFSL), become authorised by an AFSL holder or qualify for specific ‘relief’ from the regime under an ASIC determination. The FSRA does not apply to real estate agents in their capacity selling individual real property. It does however include financial services provided in relation to products such as general insurance and managed investment schemes. Click here for more information about the provision of insurance products. (file size 72 KB) ASIC has advised the REIA that whilst advice in relation to investment properties is not covered by the Act, if agents 'compare the potential return on such properties to other financial products like shares or management investments they may be caught as they may be regarded as providing financial product advice in relation to shares and managed investments'. Agents providing these services will either need to be licensed or be authorised by a licensee and must also meet the requirements of ASIC's Policy Statement 146. For more information, see ‘Frequently Asked Questions’ on the ASIC website: www.asic.gov.au Valuations of Shares in Real Estate CompaniesThe Australian Securities and Investment Commission (ASIC) gazetted Class Order 05/1243 [CO 05/1243] “Licensing Relief for Valuers Providing Valuations of Shares in Real Estate Companies” 20 December 2005 which provides unconditional relief for persons who provide financial product advice where the advice is, or is incidental to, a valuation of shares in a real estate company. This means that the licensing, conduct and services disclosure applicable under the Australian Financial Services Licensing Regime will not apply to those persons in those circumstances. In effect, valuers no longer need to hold an Australian Financial Services License to provide a valuation of shares or land held by a real estate company. A detailed definition of a real estate company is contained within the Class Order. A copy of CO 05/1243 and ASIC’s accompanying Explanatory Statement can be found at: www.asic.gov.au |
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