FAAA says breach regime based on a ‘mistake’

The Financial Advice Association of Australia (FAAA) has urged the Tax Practitioners Board (TPB) to learn from the financial services when it comes to implementing the breach reporting regime under the Tax Agent Services Act.

Referencing the breach reporting regime imposed on financial advisers, the FAAA said the changes “made the mistake of unnecessarily lowering the threshold of what needed to be reported to ASIC (the Australian Securities and Investments Commission).

It said this had significantly increased the volume of reports and the workload for all in operating the regime.

“ASIC have recently expressed concerns about what they consider to be under-reporting. There is evidently inconsistent application of the obligation across the industry, however particularly in comparison between large licensees and some smaller licensees,” ASIC told the TPB.

“In our view, the TPB can leverage this experience in the financial services sector and ensure that materiality is appropriately applied and cost implications for industry are carefully considered. It is also critical that there is a strong understanding of the obligation, with clear guidance provided,” it said.

In detailed feedback to the TPB around a draft Information Scheme on the new TASA breach reporting regime, the FAAA also said that whilst the board had gone to great length to explain what a significant breach is, “this is still very complex and confusing”.

“It is likely that many practitioners would need to get legal advice. This is problematic as it will be costly, however it will also increase the risk that people will not report, as it is too confusing and costly,” the FAAA said.