New Code of Conduct: Settlement agents bulletin issue 62 (October 2016)
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3 October 2016
A review of the Settlement Agents’ Code of Conduct 1982 (old Code) under the Settlement Agents Act 1981 has been completed following a consultation period held in April and May of this year that provided industry members with the opportunity to make comment on the proposed changes to the Code.
The Settlement Agents Code of Conduct 2016 (new Code) is to be gazetted on 4 October 2016 and will take effect on 5 October 2016.
A two-month transition period is in place. During this period, if an agent fails to comply with the new Code, but does comply with the old Code, they will not be taken to be in breach of the new Code.
Agents should make it a priority to revisit their business practices and procedures during the transition period, in order to implement any changes necessary to comply with the new Code. The two-month transition period also provides an opportunity for agents to educate themselves and their staff about the requirements of the new Code.
The redrafting of the rules brings the new Code in line with modern legislative requirements and includes new rules requiring settlement agents to:
- disclose to their client if they will receive a fee for referring their client to a third party service provider;
- comply with any fiduciary obligations that may arise in their role as agent; and
- act in good faith and in the best interests of the client.
It is important to note that despite the introduction of a new Code, the underlying duties and responsibilities for industry members remain the same.
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