For the latest FSR news, see our Breaking News page.
Government releases further FSR regulations (Batch 7)
24 December 2003
The Government has released further draft regulations that will refine the operation of certain elements of the Financial Services Reform Act 2001. The closing date for submissions on the regulations is 23 January 2003.
Regulations receive assent
23 December 2003
The Governor-General has given assent to the Corporations Amendment Regulations 2003 (No 9), Corporations Amendment Regulations 2003 (No 10) and Corporations Amendment Regulations 2003 (No 11).
ASIC provides further options to meet cash needs requirements
23 December 2003
ASIC has announced alternatives for entities within a corporate group to be able to satisfy the cash needs requirement under PS 166: Licensing: Financial requirements without completing individual cash flow projections. For further details, see the ASIC Information Release.
ASIC provides further relief for joint product disclosure statements
23 December 2003
ASIC has released class order [CO 03/1092] which permits two or more product issuers to prepare a joint PDS. To qualify for relief the client must be informed:
- that the PDS covers two or more separate financial products;
- of the identity of the issuer of each financial product it covers;
- that each issuer takes full responsibility for the whole PDS;
- which external dispute resolution schemes are able to deal with complaints relating to the products covered by the PDS; and
- how they may exercise their cooling-off rights (if any).
ASIC issues licensing relief for certain wholesale foreign financial
services providers
23 December 2003
ASIC today announced class orders relieving the following wholesale foreign financial services providers from the requirement to hold an Australian financial services licence:
- the Financial Services Authority of the United Kingdom [CO 03/1099];
- the Securities and Exchange Commission of the United States [CO 03/1100];
- the Federal Reserve Board and the Office of the Comptroller of Currency of the United States [CO 03/1101];
- the Monetary Authority of Singapore [CO 03/1102]; and
- the Securities and Futures Exchange of Hong Kong [CO 03/1103].
Temporary licensing relief during period of consultation
23 December 2003
ASIC has published six class orders providing temporary relief to specific kinds of service providers from the financial services licensing regime. The class orders apply only in limited circumstances, and generally allow the current arrangements for these service providers to continue while the Federal Government or ASIC consults with industry, consumers and other interested parties about how the FSR regime applies to them. The temporary relief covers the following kinds of services:
- credit ratings given by credit rating agencies (relief until 1 July 2005) [CO 03/1093];
- the operation of law society professional indemnity schemes, fidelity funds, statutory deposit accounts and public purpose funds (relief until 1 July 2005) [CO 03/1094] - [CO 03/1095];
- certain actuarial services provided by actuaries (relief until 1 July 2005) [CO 03/1096]; and
- the operation of securitisation vehicles (relief until 30 September 2004) [CO 03/1098].
ASIC releases final socially responsible investing guidelines
17 December 2003
ASIC has today released its guidelines for the inclusion of information relating to labour standards and environmental, social and ethical factors in the product disclosure statements (PDSs) of investment products. The guidelines, which have been developed after extensive consultation with stakeholders following the release of an ASIC discussion paper in December 2002 and draft guidelines in September 2003, allow product issuers to determine for themselves:
- whether they have regard to any aspect of these considerations;
- which particular factors they will consider; and
- how they will consider them (eg, what methodology they will use in determining environmental standards).
The guidelines state that where these socially responsible investment considerations are taken into account, the PDS must tell consumers which matters are taken into account and how they are taken into consideration, so that consumers can clearly understand the approach. The PDS must also clearly state where the investment firm does not take such matters into account.
Product issuers will be required to comply with the guidelines after the expiry of the transition arrangements, which means they will apply to all PDSs:
- dated on or after 11 March 2004;
- given to a person on or after 11 March 2005
ASIC has announced it will review these guidelines in 2006.
For further details and to access a copy of the guidelines, refer to ASIC's website. (For information about ASIC's earlier discussion paper and draft guidelines, refer to our Breaking News for 19 December 2002 and 3 September 2003.)
FSR Amendment Bill receives Assent
17 December 2003
The Financial Services Reform Amendment Act 2003 received Royal Assent on 17 December 2003. The majority of changes introduced under this legislation take effect from 18 December 2003.
Senate passes the FSR Amendment Bill 2003
5 December 2003
The Financial Services Reform Amendment Bill 2003 was passed by the Senate today with some amendments.
Regulations receive assent
13 November 2003
The Governor-General has given assent to the Corporations Amendment Regulations 2003 (No 8). The regulations make amendments that:
- close a potential loophole which may have allowed for the circumvention of point-of-sale disclosure obligations;
- remove impractical point-of-sale disclosure obligations related to declined offers of financial products and situations where clients are uncontactable;
- address practical concerns regarding the disclosure of amounts paid in periodic statements for investment financial products;
- ensure that a prospective member of a self-managed superannuation fund receives information necessary to make an informed investment decision through the timely provision of a PDS;
- aid consumer comprehension by requiring disclosure in dollar terms in the first instance and where practicable in a range of disclosure documents; and
- enhance the disclosure of superannuation benefits in periodic statements.
Government releases further FSR regulations (Batch 6)
6 November 2003
The Government has released further regulations that contain a number of technical amendments that will refine the operation of certain elements of the Financial Services Reform Act 2001. In addition, some of the regulations relate to the recently introduced FSR Amendment Bill 2003 and are dependent on its successful enactment.
Government proposes amendments to the FSR Amendment Bill 2003
23 October 2003
The Government proposes to move amendments to the FSR Amendment Bill 2003 when it is debated, which is expected to occur in November 2003. The Government has released the final version of the proposed amendments to the Bill and the Supplementary Explanatory Memorandum.
ASIC releases class order to provide relief to allow multi-issuer PDS
23 October 2003
ASIC has released a new class order [CO 03/0876] relating to the preparation of a product disclosure statement by multiple issuers. The class order relief permits a PDS to be prepared by more than one issuer where the:
- issuers are related bodies corporate;
- financial products offered in a single PDS document are of the same kind;
- relationship between the issuers and products is disclosed;
- financial products offered under a single PDS are either all unlisted or all listed; and
- PDS provisions in Part 7.9 of the Corporations Act apply to all of the financial products offered by the issuers in the PDS.
ASIC releases version 4 of eLicensing and AFS Licensing Kit
21 October 2003
ASIC today released version 4 of the eLicensing system and an updated version of the AFS Licensing Kit. These latest versions take into account recent changes to regulations, class orders and the recent updates to ASIC's industry guides. For further details, see the ASIC press release.
ASIC releases new licensing guide
9 October 2003
ASIC has released a new licensing guide Meeting the financial requirements for your AFS licence: Compliance with Policy Statement 166. The guide is designed to provide practical guidance to licence applicants, licensees, accountants and auditors about how to meet their obligations under PS 166: Licensing: Financial requirements.
ASIC issues additional guidance for FSR relief applicants
2 October 2003
ASIC has provided additional guidance on the factors it considers when assessing applications for relief from the licensing or disclosure provisions of the FSR regime. The additional guidance is provided in amendments to PS 167: Licensing: Discretionary powers and transition and PS 169: Disclosure: discretionary powers and transition. ASIC's general policy approach has not changed, however, the amendments include additional factors that may be relevant to ASIC in deciding whether to exercise its relief powers. These additional factors are:
- financial products - whether a reasonable person would think that the predominant purpose of the product is not of a financial nature;
- financial services - whether a reasonable person would think that the predominant purpose of the products to which the service relates is not of a financial nature;
- whether the service or product is subject to adequate alternative regulation;
- whether the likelihood and extent of potential consumer detriment resulting from the proposed relief is minimal; and
- whether the service or product is only provided to wholesale clients.
ASIC provides limited relief for foreign financial services
1 October 2003
ASIC has issued four class orders [CO 03/823], [CO 03/824], [CO 03/825] and [CO 03/826] providing technical relief in certain circumstances for foreign financial services. The class orders have been provided in response to two main industry concerns:
- whether the new FSR regime applies in some cases to certain providers of foreign financial services or products; and
- the degree of duplication of obligations under the FSR regime where a service provider is sufficiently regulated in another jurisdiction.
Government proposes amendments to FSR Amendment Bill 2003
26 September 2003
The Government proposes to move amendments to the Financial Services Reform Amendment Bill 2003 when it is debated, which is expected to occur in October. The Bill was introduced into the House of Representatives on 26 June 2003. For further details see the proposed amendments and the explanatory information.
ASIC announces alternative means to satisfy cash needs requirement
24 September 2003
ASIC has announced an alternative means for entities within a corporate group to satisfy the cash needs requirement under Policy Statement 166: Licensing: Financial requirements.
Changes to PS 166 for foreign exchange dealers
24 September 2003
ASIC has announced changes to the financial requirements to be imposed on foreign exchange dealers applying for an Australian financial services licence.
ASIC updates industry guides for AFS licence applicants
22 September 2003
ASIC today released updated versions of its guides in relation to the following industries:
- building societies and credit unions;
- financial advisors;
- life and general insurance brokers;
- market makers, advisers, brokers and dealers in derivatives and foreign exchange contracts;
- responsible entities and investor directed portfolio services operators;
- stockbrokers; and
- superannuation trustees.
The guides are designed to help industry participants in the process of applying for an Australian financial services licence.
ASIC releases policy statement 176 in relation to wholesale foreign
services providers
12 September 2003
ASIC today released PS 176: Licensing: Discretionary powers - Wholesale foreign financial services providers. Under the policy statement, ASIC may grant relief from the Australian financial services licensing requirements to a wholesale foreign financial service provider (FFSP) where the FFSP can satisfy a two-pronged test:
- the FFSP's overseas regulatory authority must deliver sufficiently equivalent regulatory outcomes to the Australian regulatory regime; and
- there must be effective co-operation arrangements between ASIC and that overseas regulatory authority.
PS 176 follows ASIC's Principles for cross border financial services regulation which were released in November 2002.
ASIC releases class order on reporting requirements for natural persons
12 September 2003
ASIC today released a new class order [CO 03/748] on reporting requirements for Australian financial services licensees who are natural persons. The class order applies to the statement of financial performance that must be prepared and lodged by a natural person licensee under section 989B(1) of the Corporations Act. The class order permits a natural person to exclude from the statement revenues and expenses that do not relate to the person's financial services business.
ASIC issues draft section 1013DA 'SRI' guidelines
3 September 2003
ASIC today released draft guidelines for the inclusion of information relating to labour standards and environmental, social and ethical factors in the product disclosure statements (PDSs) of investment products. The draft guidelines were developed following consultation on a discussion paper ASIC issued in December 2002. Submissions received on the discussion paper indicated dissatisfaction with the use of the term 'socially responsible investing (SRI)' guidelines, and for this reason ASIC has chosen not to use the term in developing the draft guidelines.
ASIC is inviting submissions on the draft guidelines by 15 October 2003. (For information on the earlier discussion paper, refer to our Breaking News for 19 December 2002.)
Government releases further draft FSR regulations
27 August 2003
The Government has released further draft regulations that make some technical amendments to the FSR regulations including regulations that:
- introduce a whole or predominant purpose test to determine whether a financial product falls within the credit facility exemption;
- specify that Australia Post money orders and low-value non-cash payment facilities are not financial products;
- provide limited relief from licensing for overseas service providers;
- specify when disclosure documents will be 'made available' and relax the PDS requirements relating to uncontactable product holders;
- clarify the disclosure requirements for disclosure documents and periodic statements; and
- deal with various other issues relating to, for example, right of debenture holders, advice on custody services, school banking, store vouchers, employee dealings, the timing of providing a PDS for a self-managed superannuation fund, short selling and transitional PDS relief for warrants.
Comments on the proposed draft regulations must be sent to Treasury by 12 September 2003.
ASIC issues relief in relation to non-cash payment facilities
13 August 2003
ASIC has issued a new class order [CO 03/705] which clarifies that holders of Australian Financial Services Licences will generally not require an additional licence authorisation to give basic advice on, or arrange for their client to use, most non-cash payment facilities.
ASIC releases fee disclosure model
5 August 2003
ASIC has released a good practice model for fee disclosure in Product Disclosure Statements for investment products. The model is in a report which is part of ASIC's ongoing fee disclosure project.
ASIC issues relief for pooled development funds
31 July 2003
ASIC has issued a new class order [CO 03/653] which exempts a pooled development fund from the requirement to hold an Australian financial services licence for the provision of a financial service before 11 March 2004 that consists only of dealing in, or providing general advice on, the fund's own securities.
ASIC issues relief in relation to streamlined applications
22 July 2003
ASIC has issued a new class order [CO 03/645] to ensure that an applicant, who is able to streamline an application in relation to a product which forms part of one of the specified financial products, is able to be authorised to provide financial services in relation to all of the relevant specified products under the streamlined application procedure.
ASIC releases new licensing guide
22 July 2003
ASIC today released a new licensing guide Responsible officers: Demonstrating compliance with organisational competency obligations. The guide explains how applicants for an Australian financial services licence can demonstrate that they comply with ASIC's competency obligations in Policy Statement 164 Licensing: Organisational capacities. PS164 outlines five alternatives that applicants may use to demonstrate the competency of their responsible officers. The new guide addresses questions raised by different industry groups about how each of these alternatives is applied during assessment of licence applications.
ASIC issues relief for issuers of certain products
17 July 2003
ASIC has issued a new class order [CO 03/606] which exempts a person from the requirement to hold an Australian financial services licence for the provision of financial product advice where the advice is general advice and the advice is contained in a document that is required by, and prepared by the person as a result of a requirement in the Corporations Act 2001 or the Superannuation Industry (Supervision) Act 1993.
Government confirms that transition period will not be extended
17 July 2003
The Treasurer has confirmed that the Government will not extend the deadline for transition to the new FSR regime beyond 11 March 2004. In an address to the CCH Forum in Sydney, Mr Costello said that, with just over 230 days to go, the Government is actively encouraging businesses in their transition to the regime.
ASIC announces its interim position on the regulation of mutual risk
products
15 July 2003
ASIC has announced its interim position in relation to the regulation of mutual risk products (MRPs). MRPs are products that provide an alternative to conventional insurance products and generally involve participation in a 'mutual' scheme based around particular professions, small business associations, franchise operations or community groups. The ASIC interim position statement provides guidance about the:
- application of the managed investment and licensing provisions of the Corporations Act to MRPs;
- circumstances in which ASIC will grant relief; and
- general approach to licensing people who provide financial services in relation to MRPs.
ASIC releases FAQ in relation to promissory notes
14 July 2003
ASIC has released an FAQ in relation to promissory notes and the circumstances when promissory notes are likely to be regulated as financial products. Generally, where an offer involves just a promissory note with a face value of at least $50,000 and no other special features, it will not be a financial product under the Corporations Act.
Government introduces the FSR amendment bill
26 June 2003
The Government introduced the Financial Services Reform Amendment Bill 2003 into Parliament today. The Bill clarifies and amends various aspects of the FSR regulatory framework. For further details of the matters covered by the Bill, see the Explanatory Memorandum.
ASIC releases policy statement 175 and new class order
26 June 2003
ASIC today released PS 175: Financial Product Advisers - Conduct and Disclosure setting out how ASIC proposes to administer conduct and disclosure obligations under the Corporations Act relating to the provision of financial product advice to retail clients. PS 175 has been developed in light of submissions received in response to ASIC's policy proposal paper which was released for public comment in December 2002.
ASIC has also released a new class order [CO 03/448] which provides relief to permit a financial services guide and a product disclosure statement to be combined in one document in certain circumstances.
Regulations receive assent
12 June 2003
The Governor-General has given assent to the Corporations Amendment Regulations 2003 (No 4). These are based on the draft regulations which were released on 12 March 2003. They also include some of the draft regulations issued on 28 March 2003. For an overview of what is covered by the regulations, refer to our Breaking News for 12 March 2003 and 28 March 2003 and the Explanatory Statement.
Government releases further draft FSR regulations
10 June 2003
The Government has released further draft regulations that make some technical and administrative amendments to the FSR regulations including regulations that:
- clarify that surety bonds are not financial products;
- introduce a value test in relation to foreign exchange contracts for the purposes of determining whether a client is a retail or wholesale client;
- provide a licensing exemption for certain experts' reports in a disclosure document and for certain nominee company subsidiaries of participants in licensed markets where those nominee companies provide custodial or depository services;
- extend the exemption from the requirement to provide a financial services guide to term deposits with a maturity of up to 2 years (the exemption regarding statements of advice is similarly extended) and to general financial advice given during a telephone call to existing customers or to customers where a sale is not made during the call;
- clarify the content of the auditor's report of a licensee;
- allow bodies corporate unrelated to a licensee to acquire financial products as agent for employees of the licensee if certain conditions are met;
- remove the obligation on self-managed superannuation funds to lodge an 'in use' notice; and
- prescribe that a new financial product is issued when the nature of a superannuation fund changes from the growth phase to the payout phase.
Comments on the proposed draft regulations must be sent to Treasury by 20 June 2003.
Government releases proposed amendments to FSR regime
6 June 2003
The Government released a list of proposed amendments to the FSR regime which will be included in the FSR Amendment Bill to be introduced into Parliament soon. The amendments are designed to clarify aspects of, and facilitate the smooth transition to, the regime.
Regulations receive assent
9 May 2003
The Governor-General has now given Royal Assent to the Corporations Amendment Regulations 2003 (No 3). These regulations include many of the regulations which were released on 12 March 2003. They also include Regulation 7.1.29 which was released as a draft on 17 December 2002. Regulation 7.1.29 sets out activities which do not constitute a financial service under the FSR provisions. For an overview of what is covered by the regulations, refer to our Breaking News for 17 December 2002 and 12 March 2003. Treasury is still considering the other draft regulations which have been released for consultation.
ASIC releases updated employee share schemes policy statement and class
order relief
1 May 2003
ASIC has today released an update of Policy Statement 49 - Employee Share Schemes (and related class order relief ([CO 03/184]). The update includes changes to take account of the FSR legislation (as well as the Corporate Law Economic Reform Program Act 1999).
ASIC releases updated version of the Australian Financial Services
Licensing application
29 April 2003
ASIC has today released version 3 of the eLicensing System and the Australian Financial Services Licensing Kit, to be used by applicants for an Australian Financial Services Licence under the FSR regime. These documents and guidelines on how to apply for a licence under FSR are available from ASIC's website.
ASIC releases policy proposal paper on managed discretionary account services
16 April 2003
ASIC today released a policy proposal paper on managed discretionary account (MDA) services setting out ASIC's proposals for regulating MDA services offered to retail clients under the Corporations Act.
Comments on the proposal paper must be sent to ASIC by 22 May 2003.
ASIC issues class order giving relief from requirement to include updated information in product disclosure statements
10 April 2003
ASIC today issued a new class order [CO 03/237], which exempts issuers of product disclosure statements (PDS) from the requirement to keep a PDS up to date, where the requirements set out in the class order are met.
Regulations receive assent
8 April 2003
The Governor-General has given Royal Assent to the Corporations Amendment Regulations 2003 (No 2). Under these regulations, the making of unsolicited off-market offers to retail investors to buy their financial products will require a licence under FSR unless the person making the offer includes information about the current market value of those products with the offer.
Following on from the new regulations, ASIC has issued a new class order [CO/03/244] which provides relief from the requirement to hold an Australian financial services licence for some offers that would otherwise constitute a financial service under the new regulations.
Government releases further draft FSR regulations
28 March 2003
The Government has released further draft regulations (updated on 3 April) that make some technical and administrative amendments to the FSR regulations. The more important proposed changes relate to:
- changing the term 'spot foreign exchange contract' to 'foreign exchange contract' to clarify the treatment of these types of products under FSR
- clarifying value test rules for derivatives to assess whether a client is wholesale or retail
- clarifying the scope of the non-cash payment exception in relation to payments made to joint accounts
- consistent use of the term 'provide' in both the FSR regulations and legislation in relation to financial advice
- exempting some (overseas) custodial and depository services from the Australian financial services licence (AFSL) requirements
- requiring specific authorisation to use some terms to describe the types of financial services provided (ie, financial adviser, financial planner, investment adviser, investment planner, wealth adviser and wealth planner)
- exempting product issuers who are providing general advice only about their products to licensed intermediaries from the requirement to obtain an AFSL
- removing the requirement to notify ASIC of the appointment of an auditor where the auditor's details have already been included in the initial licence application
- waiving the fee for notification of change of name of a licensee (proposed Corporations (Fees) Amendment Regulations).
Comments on the proposed draft regulations must be sent to Treasury by 17 April 2003.
ASIC reissues pro forma 209: AFS licence conditions
26 March 2003
ASIC today reissued Pro Forma 209: AFS Licence Conditions, which reflects changes made to ASIC policy statements and provides further clarification on the conditions of Australian Financial Services licences.
Government releases more draft FSR regulations
12 March 2003
The Government has released another set of draft regulations
that are intended to clarify the operation of some parts of the FSR legislative provisions. The main proposed changes relate to:
- the definition of 'non-cash payment financial product'
- exemptions from licensing requirements and disclosure obligations for people who arrange for non-cash payments or provide information about payment options in relation to the supply of goods and services
- conduct that constitutes 'making a market'
- clarifying the position in relation to financial products that combine credit and deposit facilities
- conduct that is not to be considered a custodial and depository service and will not amount to a dealing
- the requirement to provide a financial services guide in some situations (including where general financial advice has been given and also for custodial and depository services established prior to the start of FSR)
- disclosure obligations in some situations (including in relation to disclosure of fees and charges, warrants and options to acquire issued securities during the transition period and obligations on transitioning friendly societies)
- issues of new interests in superannuation funds and disclosure obligations in relation to superannuation withdrawal benefits.
Comments on the proposed draft regulations must be sent to Treasury by March 2003.
Regulations receive assent
11 March 2003
The Governor-General has now given Royal Assent to the Corporations Amendment Regulations 2003 (No 1) which were released in draft in December 2002.
IFSA issues guidelines on socially responsible investment disclosure
19 February 2003
IFSA has today released guidelines on the principles to be adopted in developing socially responsible investment disclosure (ie, the extent to which labour standards and environmental, social or ethical considerations are taken into account when making investment decisions). The new requirement to make this disclosure was introduced under FSR and applies to financial products that have an investment component. (In December 2003, ASIC released guidelines for the inclusion of information relating to labour standards and environmental, social and ethical factors in product disclosure statements of investment products, which replace the guidelines issued by IFSA. For further details, refer to our Breaking News for 17 December 2003.)
ASIC and ACA release financial planner survey results
11 February 2003
The Australian Securities and Investments Commission and the Australian Consumers Association released today their joint survey of the quality of financial advice provided by financial planners around Australia. The financial plans prepared by advisers were assessed against existing legal requirements (not under FSR).
ASIC releases updated policy statement 146
22 January 2003
ASIC today released an updated version of PS 146: Training of financial product advisers, which sets out minimum training standards for people providing financial product advice to retail clients. The amendments focus on ASIC's training requirements for advisers:
- advising on basic deposit products and related non-cash payment products; and
- who only provide general advice
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