Disclosure

Requirements

PSL in all states and territories requires that all documents (including electronic communication) provided to a client or prospective client by a participating member of the Institute scheme must carry a statement that their liability is limited.

Regulations in New South Wales, Western Australia, South Australia and Queensland have prescribed the form of the disclosure statement as:

'Liability limited by a scheme approved under Professional Standards Legislation' *

The PSC recommends that this form of wording be adopted by members in jurisdictions where the form of notification is not prescribed.

Where the business stationery of a practice is shared with an AFS licensee within the practice, the following may be added to the above disclosure.

*Other than for the acts or omissions of financial services licensees

Consequences of non disclosure

Under Victorian, Queensland, Northern Territory and Tasmanian legislation, a scheme does not limit the liability of a member if this disclosure is not provided. This impacts the schemes in Victoria, Queensland and the Northern Territory. No scheme has been approved in Tasmania.

Under PSL in all states, failure to provide the disclosure of the member's limitation of liability under the scheme constitutes an offence carrying a penalty. For example, in NSW the maximum penalty is $5,500, in WA and the ACT it is $5,000 and in SA it is a maximum penalty of $20,000.

What does this mean for me? Where there are any participating members of the Institute scheme who are principals of your practice (excluding AFSLs) all business stationery and electronic communications should carry the PSC disclosure statement: 'Liability limited by a scheme approved under Professional Standards Legislation' In the event of a claim, members in Victoria, Queensland and the Northern Territory will be exposed to unlimited liability unless the disclosure statement appears on business stationery.

Business stationery

FAQs Disclosure of limited liability

 

Article last updated 16 November 2010