The ASIC referencing checking protocols commenced 1 October 2021 and apply when employing or authorising financial planners (and mortgage brokers).
Licensees must undertake reference checking and information sharing regarding former, current and prospective employees.
The reference checking obligations address from the Banking Royal Commission Recommendations 1.6 (Consumer lending) and 2.7 (professional discipline of financial advisers) and are contained in the Financial sector reform (Hayne Royal Commission Response Act 2020.
The obligations are summarised in the ASIC INFO Sheet 257 – ASIC reference sharing protocol, which contains obligations for both the:
- recruiting licensees, and
- referee licensees.
A civil penalty applies for non-compliance with ASIC protocol.
Recruiting licensee - Reasonable steps
Recruiting licensees must take reasonable steps to obtain a reference, which includes:
- Seeking written consent
- Requesting a reference
Licensees must seek references according to the table below from the last five years:
| If a prospective representative… |
a reference must be sought from… |
| Is currently employed/ authorised |
The current licensee(s) |
| Has been employed or authorised by the current licensee <12 months |
the current licensee and the most recent former licensee (if any) in the past 5 years |
| Is not currently employed |
the most recent former licensee (and, if the prospective representative was with that licensee for less than 12 months, the next most recent former licensee (if any) in the past 5 years |
| Is a licensee |
that licensee |
The recruiting licensee may request additional references from other former licensees in addition to those listed above (meeting all other conditions of the ASIC Protocol).
Recruiting licensee - Seeking consent from representative
The recruiting licensee must use the template consent form provided by ASIC.
Recruiting licensee - Requesting a reference
The recruiting licensee must ask in writing the questions provided in the template reference request provided by ASIC. The questions must not be amended, but minor amendments can be made to the format.
A copy of prospective representative’s completed consent is to be included with the reference request.
Requesting clarification or update from a referee license can be made in writing within six months from the date the original reference was provided.
Additional information from a referee licensee can be requested, so long as does not reduce the scope of the template reference request, however, the referee license is not obliged to respond to this additional request.
Defence of qualified privilege only applies to information that falls within the template reference request of the ASIC Protocol.
Referee licensee - Providing a reference
The referee licensee must provide the reference within 10 business days, unless both parties agreed to a longer period (maximum of 30 days).
No reference is to be provided if no written consent of the prospective representative has been provided (or subsequently withdrawn/ expired).
The reference responses should include all information referee licensee is aware of; and be complete, accurate and based on facts. It should address current circumstances and historical performance relating to the most recent five years.
If referee is unable to answer any questions an explanation should be provided as to why.
The referee licensee does not need to answer additional information requested by a recruiting licensee that is in addition to the template reference request.
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