There are four  short-answer questions in this section . Answer all questions.

 Question 1 Disclosures ( Word limit: 600 words)

 

Sisters Emily and Kate (first introduced in the analysis task case study) have had a successful 12 months. They have implemented their new software at Kate's hospital, and it has been adopted throughout the network of hospitals in Australia, New Zealand, Singapore and Hong Kong. They have made sufficient profit to buy out their Uncle Tom through fully franked distributions from their company to each other as shareholders. Kate now has $350,000 in her mortgage offset account. Emily has contributed $110,000 to her superannuation with the view to accessing it to purchase her first home. (Note: A maximum of $50,000 can be accessed from Emily's superannuation.) The business structure they established was a trust with a corporate trustee of which both Emily and Kate are directors. Emily and Kate are the beneficiaries of the trust. Kate has established a trust, and that trust will be the beneficiary from the business trust, and Emily is a sole beneficiary of the business trust. The sisters want to expand and realise that they need to employ more people to do that. They have found an empty former grocery store in a neighbourhood centre shopping strip. There is car parking underneath for staff and other shops and services in the centre that would make coming to the office a one-stop place for new staff. You are a fully qualified financial adviser with 10 years' experience. Kate sends you an email asking if you could provide them with advice. She has cc'd Emily into the message. You reply to Kate and Emily that you would be happy to provide them with advice. You are already aware of some of their financial situation, and you customise your email response in the following way: 'Hi Emily and Kate, I'd be happy to discuss your financial situation and options with you. I will need to gather some more information from you both about your current financial circumstances. Knowing your current corporate structure, would you consider setting up a self-managed superannuation fund (SMSF) and using your existing superannuation balances as a deposit for the new office, then borrowing the balance via the SMSF? In any event, let's arrange a time for a Zoom meeting and we will get started.' Notes: You are required to undertake independent research to answer the following questions. Take care to ensure you answer these questions using your own words. Where applicable, your response should relate to the case study details provided and for parts where you utilise other resources to support your answer, ensure you cite and reference these. (a) Given the content of the email, what two (2) disclosure documents should you provide to Emily and Kate at this early stage of the advice process and state the legislative source of these disclosures. (5 marks) (b) Explain the purpose of each disclosure document, with support from the relevant ASIC Regulatory Guide(s). (5 marks) (c) What methods can you use to make those disclosures to Emily and Kate? (2 marks)

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Question 2 Regulatory framework (10 marks | Word limit: Identify four (4) additional regulatory obligations placed on financial services providers under the current legislative and regulatory framework, aimed at ensuring that consumers, like Emily and Kate, are protected and receive appropriate financial advice. For each regulatory obligation, discuss its legislative and/or regulatory source and how the obligations are intended to protect consumers. (10 marks) Notes: Do not include the two (2) disclosure document obligations already identified in Question 1. You are required to undertake independent research to answer this question. You may include legislative and regulatory framework obligations that are legislated but not yet implemented. Your answer should only refer to the disclosure obligations for the provision of personal advice to a retail client when providing written advice to clients. Your response should not rely just on one section of the Act and its other closely related legislation but should also identify separate and independent obligations.

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Question 3 Regulators as intermediaries (10 marks | Regulators are important intermediaries in any financial services system. They promote the smooth operation of the markets and protect the integrity of the financial system. The level of regulation differs between countries; however, there has been an increasing trend around the world to tighten the regulation of financial markets in an attempt to protect investors. There are also a number of international regulators that provide international standards and give assistance and guidance to domestic regulatory bodies. For each of the regulatory bodies listed below, briefly explain the role it plays in financial planning in Australia and the role each regulatory body has in contributing to Australia's economic wellbeing: (a) ASIC (2 marks) (b) APRA (2 marks) (c) ASX (2 marks) (d) ACCC (2 marks) (e) AUSTRAC (2 marks) Notes: You are required to undertake independent research to answer this question. It is important here that you answer in your own words and do not copy/paste or paraphrase the course notes or commonly accessed websites for these bodies. You must address each regulator separately in your answer.

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Question 4 Superannuation and changing government policy (15 marks | Consider Kate and Emily from the case study in the analysis task and Question 1 of this assignment. (a) Identify two (2) major changes to the Superannuation system announced in the 2021 Budget and which may impact now on Kate (age 33) and Emily (age 32). (5 marks) (b)Assume that time has passed and the sisters are now approaching retirement, discuss how any of the changes in the May 2021 Budget could have impacted on the sisters' retirement savings pool. (5 marks) (c) Consider and discuss any two changes which you think could be made to the Superannuation rules over the next few years and consider how your suggested changes could impact on the sisters' future retirement. 1 mark for each possible change nominated and 3 marks for discussing how the sisters could be affected by such change. (5 marks) Note: Support your answers with relevant independent research. Y

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Question 5 Updated regulatory requirements (48 marks | Word limit: ) In 2019, the following two (2) legislative amendments were introduced: 1. Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) 2. Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth). PART 1 Discuss the two (2) legislative amendments above using the headings below. Ensure that each part of your answer is clearly labelled and do not merge parts of your answers. (a) Amendment summary Provide a summary of the amendment, including its purpose, referring to any other Acts that are impacted by the amendment. Include in your answer the origin of the amendment. (What behaviours is the amendment attempting to eliminate?) (6 marks per amendment, total of 12 marks) (b)Amendment impact to ASIC's operation How have these amendments impacted the way ASIC operates? (6 marks per amendment, total of 12 marks) (c) Amendment impact to personal financial advice Explain how the amendment will impact the provision of personal financial advice to retail clients. (5 marks per amendment, total of 10 marks) PART 2 Looking at each amendment, answer the following questions: (a) In the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) Identify in general terms the key changes in the Act to non-pecuniary (i.e. non-financial) offences and what penalties (non-pecuniary) can now apply to such offences. (2 marks) The Act now introduces a Formula for calculating pecuniary (i.e. financial) penalties for criminal offences. Outline a brief comment on how the Formula is applied. (1 mark) Produce a schedule of the actual pecuniary (financial) penalties as follows for: - Criminal offences applying to (a) individuals (1 mark) and (b) body corporates (1 mark); and - Civil contraventions applying to (a) individuals (1 mark) and (b) body corporates (1 mark) (b) Explain the impact of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth) for individual authorised representatives and AFS licence holders of the implementation of the change to the law (7 marks) Notes: Provide appropriate legislative references in your answers and assume any announced changes will proceed in full.