Commissioner for Financial Advisers David Mayhew says it is an important milestone for the implementation of the new regime.

"This confirms that Authorised Financial Advisers will be a reality from December 1. From that date advisers giving personalised investment advice to retail clients will be able to operate within the new regime designed to promote the sound and efficient delivery of financial advice and to encourage public confidence in the professionalism and integrity of advisers," he said. 

He also noted that from December 1 all financial advisers will be subject to the statutory duties to exercise care, diligence and skill and not to engage in misleading or deceptive conduct.

At the same time, the Securities Commission has approved the standard conditions for incorporation in the authorisation of AFAs.  Those conditions provide the framework for the regulatory relationship between the individual AFA and the Securities Commission, for example, in relation to reporting obligations.

Submissions on the proposed standard conditions will be published by the commission shortly. 

Mayhew sounded a note of caution about the readiness of the majority of financial advisers to engage with the new regime. 

"While the Securities Commission will have in place a licensing process for advisers who want to be AFAs by December 1, too few are currently getting on with the registration and assessment steps necessary for authorisation.  There is a real risk that delay now will create a log jam next year," he said.

The Commission has previously said that, provided advisers applied for authorisation by 31 March 2011, the Commission should be able to complete the process by the critical date of 1 July 2011.

"But that assumes significant numbers have already been processed before March 31", Mayhew says.  "The experience to date has been disappointing and, unless there is more engagement now, there may be insufficient capacity in the system to cope with the volume of applications to be processed in the last three months before the regime is fully in force."