For the latest FSR news, see our Breaking News page.
Government releases draft amending regulations relating to disclosure of
fees and other costs
23 December 2004
The Government has released draft regulations (pdf) designed principally to give effect to the enhanced fee disclosure measures announced by the Government on 16 June 2004.
The closing date for submissions on the draft regulations is 21 January 2005. For further details on the Government's earlier announcement on enhanced fee disclosure, refer to our Breaking News for 16 June 2004.
ASIC issues class order relief to help managed investment schemes
transition smoothly to new accounting standards
22 December 2004
ASIC has today issued a new class order (CO 04/1575) to allow constitutions of managed investment schemes to be amended without a special resolution of members so that specific references to accounting standards in scheme constitutions are to accounting standards in force immediately prior to 1 January 2005 and are not affected by the transition for financial reporting purposes to Australian equivalents of International Financial Reporting Standards (AEIFRS). ASIC intends that the new class order will facilitate a smooth transition to the AEIFRS regime (which comes into force on 1 January 2005) and will avoid the need to change systems used for unit pricing and other purposes. However, any amendments made pursuant to the class order must substantially preserve members' rights as they were before the amendment.
For further details and to access a copy of the class order, refer to ASIC's website.
ASIC extends interim relief for managed investment scheme constitutions
22 December 2004
ASIC has today extended until 31 March 2005 interim relief (which was due to expire on 31 December 2004) that permits a responsible entity to include estimates of the transaction costs, value of scheme property and other expenses in setting the application and redemption price for interests in registered managed investment schemes in the scheme's constitution.
For further details relating to this latest extension of the interim relief, refer to ASIC's website. (For details on the background to this matter, refer to our Breaking News for 1 October 2004.)
ASIC extends transitional relief for specific managed investment schemes
22 December 2004
ASIC today announced the extension of interim relief currently available to some managed investment schemes under the following class orders:
- CO 98/51 – Relief from the duty to separate assets of a managed investments scheme
- CO 98/55 – Investments in unregistered schemes
- CO 02/239 – Participating property schemes
The relief has been extended from 31 December 2004 until 30 September 2005.
In conjunction with this relief, ASIC has also amended class order CO 04/194 Managed Discretionary Accounts by extending the date referred to in the class order in respect of an interest arising from an 'Eligible SELECT Master Agreement' within the meaning of CO 98/51 from 31 December 2004 to 30 September 2005.
ASIC is still considering whether to grant permanent relief (with no expiry date) or to allow the relief to expire and has said it will give reasonable notice of transitional arrangements or any change of policy before 30 September 2005.
For further details and to obtain copies of the class orders, refer to ASIC's website.
ASIC grants relief for secondary financial services providers from FSG
obligations
22 December 2004
ASIC has today granted class order relief to secondary financial service providers (SFSPs) who provide financial services to retail clients via an intermediary from the financial services guide (FSG) obligations under Part 7.7 of the Corporations Act, so that SFSPs can give their clients access to FSG information in a practical manner.
The class order relief covers four areas:
- General FSG relief under class order CO 04/1571, which applies from 1 July 2005 and, subject to conditions set out in the class order, grants relief to SFSPs from the consequences of failing to provide an FSG to a retail client where, pursuant to an arrangement between the intermediary and the SFSP, the intermediary gives the SFSP's FSG to the client.
- Transitional relief under class order CO 04/1571, which applies until 30 June 2005 (to enable SFSPs sufficient time to put in place arrangements that comply with the general FSG relief) and allows SFSPs to meet their obligations to provide an FSG to retail clients by posting it on their website (if they have one), making it available on request and meeting some other conditions specified in the class order.
- FSG relief for experts under class order CO 04/1572, which applies where an expert's report is to be included in a third party's disclosure document (eg, a prospectus or product disclosure statement (PDS)) and enables the expert's FSG to be included as a separate and clearly identifiable part of the expert's report (subject to conditions specified in the class order).
- FSG relief for arrangers under class Order CO 04/1573, which applies where a person arranges for the issue of a financial product by a product provider under an intermediary authorisation (permitted under section 911A(2)(b) of the Corporations Act) and enables the arranger's FSG to be included as a separate and clearly identifiable part of the product provider's PDS (subject to conditions specified in the class order).
In conjunction with these class orders, ASIC has also issued further guidance on the provision of secondary financial services and compliance with the Corporations Act in the form of a detailed FAQ.
For further information (including to access copies of the class orders and the FAQ guidance), refer to ASIC's website.
ASIC issues new class order refining previous relief allowing statements of
additional advice
22 December 2004
ASIC has today issued a new class order [CO 04/1556] expanding the relief issued in July this year which allowed statements of additional advice to be provided to retail clients instead of a statement of advice (SOA) in some circumstances. The changes made by class order CO 04/1556 are intended to allow financial advisers greater flexibility in providing the information required in an SOA where the adviser has an ongoing relationship with a retail client. (The previous relief contained in class order [CO 04/576] is now revoked.)
For further details and to access a copy of the new class order, refer to ASIC's website. (For further information about the earlier class order, refer to our Breaking News for 21 July 2004.)
ASIC releases policy proposal paper on the regulation of non-cash payment
facilities
22 December 2004
ASIC has today issued a policy paper on the regulation of non-cash payment (NCP) facilities. This follows on from interim licensing, conduct and product disclosure relief for low-value NCP facilities and loyalty schemes announced by ASIC in February this year which has, to date, been granted on a case-by-case basis and which expires on 30 June 2005.
ASIC is now seeking comments on its proposed longer term approach to regulating NCP facilities with a view to releasing its final policy in this area some time in May or June 2005. ASIC has also indicated that, if necessary, it will consider extending the interim relief when finalising its policy to give those affected sufficient time to comply with Corporations Act requirements or conditions of any permanent relief that ASIC may issue.
Comments on the policy proposal paper are due by 25 February 2005. For further information and to access a copy of the proposal paper, refer to ASIC's website. (For details of the interim relief currently available, refer to our Breaking News for 24 February 2004.)
ASIC issues guidance on PDS disclosure
21 December 2004
ASIC has today provided guidance for product issuers who are preparing and reviewing product disclosure statements (PDSs), which highlights compliance issues that should be taken into account to ensure that their PDSs meet both the content and presentation requirements of the law. This guidance follows an ASIC review of more than 100 PDSs prepared before 11 March 2004 and ASIC has announced that it plans to conduct a nation-wide campaign into PDSs issued by the financial services industry and that the findings from this recent review will be used to focus on specific disclosure issues for particular product classes.
The attachment to ASIC's information release issued today outlines the problem disclosure areas that ASIC discovered during its review and indicates where it will focus its attention in coming months. For further details, refer to ASIC's website.
ASIC issues report on recent relief applications from financial services
providers
21 December 2004
ASIC has today released a report on some of its decisions on recent applications for relief by financial service providers from the licensing, conduct, disclosure and managed investments provisions of the Corporations Act 2001. The report, which covers applications considered by ASIC between 11 October 2003 and 14 August 2004, provides an overview of the circumstances in which ASIC exercised, or refused to exercise, its discretionary powers to grant relief and also outlines limited instances where ASIC decided to take a no-action position in relation to non-compliance with provisions of the Corporations Act.
ASIC clarifies relief to assist charities raise funds
20 December 2004
ASIC has today released an updated version of policy statement 87: Charitable investment schemes and school enrolment deposits (PS 87) and has amended class order CO 02/184 (Charitable investment schemes - fundraising), which set out the terms of relief from the fundraising, managed investment, debenture and licensing provisions of the Corporations Act 2001. The updated documents reflect legislative changes and also provide additional clarification and guidance on the application of the relief.
For further details and to obtain copies of the updated documents, refer to ASIC's website.
ASIC issues dollar disclosure policy and extends transitional relief until
1 July 2005
15 December 2004
ASIC has today released Policy Statement 182 Dollar Disclosure on how it expects providing entities and product issuers to comply with their obligations to disclose various costs, fees, charges, expenses, benefits and interests as amounts in dollars in FSR disclosure documents (Dollar Disclosure). As part of this policy, ASIC recognises that in some limited circumstances, there are compelling reasons why Dollar Disclosure is impossible, unreasonably burdensome or not in the interests of clients and it has therefore also issued the following conditional class order relief:
- [CO 04/1430] disclosure items contingent on unknown facts and circumstances;
- [CO 04/1431] costs of derivatives, foreign exchange contracts, general insurance products and life risk insurance products;
- [CO 04/1432] interest payable on deposit products;
- [CO 04/1433] non-monetary benefits and interests; and
- [CO 04/1435] amounts denominated in a foreign currency.
ASIC has also granted class order relief, [CO 04/1434], which extends the transition to the Dollar Disclosure requirements to 1 July 2005. This class order also provides further transitional relief for issuers of periodic statements prepared before 1 July 2005 from compliance with specific disclosure requirements related to common fund deductions of fees, charges or expenses. In addition, ASIC has also released two new frequently asked questions dealing with common fund issues:
- QFS 143 - What is a common fund for the purposes of Ch 7?
- QFS 155 - How should common fund expenses be notionally dealt allocated in period statements?
For further information about the policy statement and associated class orders, refer to ASIC's website. For background information on Dollar Disclosure, refer to our Breaking News for 10 August 2004.
ASIC issues guidance on the provision of tax advice
15 December 2004
ASIC has today issued guidance, in the form of answers to two new frequently asked questions (FAQs), on the application of the Corporations Act to people who provide taxation-related advice:
- QFS 149 - Do I need an AFS licence to provide tax advice?; and
- QFS 153 - I am a financial planner. What particular requirements apply to me under the Corporations Act when I give advice about the tax implications of financial products?
For copies of the FAQs and answers, refer to ASIC's website.
ASIC issues guidance on how to vary an AFS licence
14 December 2004
ASIC has today released a guide to help licensees applying to vary their Australian financial services (AFS) licence. The guide, How to vary your AFS licence, contains useful tips and step-by-step instructions that explain the process of applying to vary the authorisation conditions and other conditions of an AFS licence using ASIC form FS03.
For further information, refer to the ASIC website.
ASIC releases updated AFS licensing kit and Small Business Guide
13 December 2004
ASIC has today released updated versions of:
- the AFS Licensing Kit (version 6); and
- Small business and your AFS licence: Compliance with Policy Statements 164 and 181.
The updated documents include details of the information that new licence applicants will be required to provide to ASIC regarding their management of conflicts of interest obligation, which was introduced by the CLERP 9 legislation and comes into effect on 1 January 2005.
For licensees who have lodged an AFS licence application with ASIC before 1 January 2005 but in respect of which ASIC has not made a decision by that date, ASIC will require applicants to provide the additional conflicts management information before it can make a decision on the application. Applicants currently applying for an AFS licence can supply the conflicts management information prior to 1 January 2005 if they wish.
For further information and copies of the updated licensing guides, refer to the ASIC website. For background details on ASIC's policies on conflicts management, refer to our Breaking News for 30 August 2004 and 3 November 2004.
ASIC announces surveillance campaign against churning and misselling of
financial products
6 December 2004
ASIC today announced a new surveillance campaign to assess how financial advisers are currently complying with their legal obligations under FSR in relation to advising clients to switch financial products. ASIC will use the findings of this campaign to inform the financial services industry about its expectations of advisers in the lead up to the commencement of the new choice of superannuation funds regime, which starts on 1 July 2005.
For further details about ASIC's new campaign, refer to ASIC's website.
ASIC release the results of its unauthorised foreign insurance market
campaign
6 December 2004
ASIC has today released a summary of the results of its campaign on the unauthorised foreign insurance market. The campaign, which started in 2003, involved a review of the operations of eight Australian general insurance intermediaries who placed business with unauthorised foreign insurers (ie, an insurer who carries on a general insurance business outside Australia and who is not regulated by the Australian Prudential Regulation Authority).
ASIC reported that it detected several apparent breaches of the law, mainly relating to registration, disclosure and dispute resolution requirements, and it has commenced investigations in relation to these matters. ASIC has said it will continue to monitor the unauthorised foreign insurance market, including continuing to assess whether the current law provides adequate disclosure and other protections in relation to consumers of insurance provided by unauthorised foreign insurers.
For further details on ASIC's campaign (including a more detailed summary of its methodology and findings as well as actions it has taken in relation to breaches), refer to ASIC's website.
ASIC provides guidance on statements of advice
30 November 2004
As part of its ongoing assistance to Australian financial services licensees on complying with their FSR obligations, ASIC has today issued guidance on how to prepare Statements of Advice (SOAs). The guidance, which is primarily focused on presentation and content requirements for an original SOA, is based on a review conducted by ASIC of a large number of SOAs provided by industry associations. ASIC's guidance addresses:
- legal requirements in relation to SOAs;
- statements of additional advice;
- what information needs to be included in the SOA about the basis for the advice;
- how information about remuneration and benefits should be disclosed (and when);
- what information needs to be provided where the recommendation is to switch financial products; and
- tips for clear, concise and effective SOAs.
For further details, refer to ASIC's website.
ASIC issues more FAQs on FSR issues
26 November 2004
ASIC has a useful resource under the FSR section of its website where it periodically posts answers to frequently asked questions (FAQs) about FSR-related matters.
These FAQs provide general information about how ASIC is regulating the financial services industry following the commencement of FSR. ASIC has recently published new FAQs (and also updated some of the existing FAQs) on the following issues:
- what information can be provided about superannuation without requiring an Australian financial services licence? (QFS 147)
- whether a responsible entity will contravene the prohibition on investing in unregistered managed investment schemes because investments are made under a mandate given to an investment manager (QFS 148)
- whether financial services provided to a trustee of a superannuation fund are provided to it as a retail client (QFS 150)
- whether ASIC policy statement PS 179 affects whether a client of a managed discretionary account is a wholesale client (QFS 151)
For details of these and other FSR-related FAQs published by ASIC, refer to ASIC's website.
ASIC consults on delivery of superannuation product disclosure for
investment strategy advice
11 November 2004
ASIC has today released a policy proposal paper, Superannuation: Delivery of product disclosure and investment choice, on how trustees of superannuation entities deliver product disclosure information about available investment strategies to members. The proposed policy relates to both the section 1012IA disclosure obligation and to the general disclosure obligations in section 1013D and section 1013E of the Corporations Act. In conjunction with the release of the policy proposal, ASIC has now also extended the delayed application of section 1012IA to superannuation entities under class order CO 03/1097 until 30 June 2005.
Comments on the policy proposal are due by 22 December 2004. For further details and to access a copy of the proposal, refer to ASIC's website.
ASIC issues guidance on managing conflicts for research analysts
3 November 2004
ASIC has today issued a guide to help research report providers (including research analysts) identify the issues they should take into account when designing, implementing and maintaining conflicts management arrangements. The guide, Managing conflicts of interest: An ASIC guide for research report providers, supplements ASIC policy statement 181, Licensing: Managing conflicts of interest, which was released by ASIC on 30 August 2004 and which sets out how ASIC expects financial services licensees to manage their conflicts of interest.
For further details about the guide, refer to ASIC's website. For further information about policy statement 181, refer to our Breaking News for 30 August 2004.
ASIC provides relief from 'in-use' notice requirements for some
employer-sponsored superannuation products
26 October 2004
ASIC has today issued class order [CO 04/1030] to provide relief in relation to the requirement to lodge 'in-use' notices under the Corporations Act for some standard employer-sponsored superannuation fund products. To assist trustees of employer-sponsored superannuation funds that have a large number of essentially identical products, ASIC will permit the lodgment of a single 'in-use' notice in respect of the common part used by each product disclosure statement (or supplementary product disclosure statement) of these products. Issuers who want to use the new procedure will be required to provide ASIC with a list of the superannuation products that have used that common part and update the list on a monthly basis.
For further information about the class order and the conditions of relief, refer to ASIC's website.
ASIC provides guidance on breach notification requirements of AFS
licensees
20 October 2004
ASIC has today issued a guide on the requirement that Australian financial services licensees notify the regulator of 'significant' breaches of their obligations. The guide gives examples of notifiable breaches. It also provides useful guidance on how to report a breach to ASIC as well as the information that should be included in a breach report. It can be accessed from ASIC's website
ASIC issues licensing relief for
wholesale FFSPs regulated by the German BaFin
19 October 2004
ASIC today announced the release of class order [CO 04/1313] which relieves wholesale foreign financial services providers (FFSPs) registered with the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) from the requirement to hold an Australian financial services licence. The relief, which took effect from 26 October 2004, applies to German banks registered with BaFin. This class order is substantially similar to the relief previously announced by ASIC in December 2003 for FFSPs regulated in other overseas jurisdictions.
For details about class order [CO 04/1313] and the conditions of the relief, refer to ASIC's website. This relief means ASIC now recognises financial regulators in the USA, the UK, Singapore, Hong Kong and Germany.
For further details about the conditions of the earlier class order relief applying to FFSPs from other countries, refer to our Breaking News for 23 December 2003.
ASIC issues licensing relief for wholesale foreign financial services
providers regulated by the US Commodity Futures Trading Commission
19 October 2004
ASIC today announced the release of a class order [CO 04/0829] relieving wholesale foreign financial services providers (FFSPs), registered with the US Commodity Futures Trading Commission (CFTC), from the requirement to hold an Australian financial services licence. The relief, which took effect from 27 July 2004, applies to futures commission merchants, introducing brokers, commodity pool operators and commodity trading advisors who are registered with the CFTC and who are members of the US National Futures Association. This class order is substantially similar to the relief announced on 23 December 2003 for FFSPs regulated in the United Kingdom, Singapore and Hong Kong.
For details about the class order and the conditions of the relief, refer to ASIC's website
For further details about the earlier class order applying to FFSPs from other countries, refer to our Breaking News for 23 December 2003.
ASIC announces phase 2 of compliance program - targeting unlicensed
operators
8 October 2004
ASIC today announced that the first phase of its FSR compliance program, which involved the orderly transition of old law licensees to the new licensing regime, is complete and it has now begun the second phase - conducting compliance checks over the next six months to remove unlicensed operators from the industry. This phase of the program will include identifying and taking action against unlicensed operators, including those who were not previously required to hold a licence but who are now regulated under the new law.
ASIC announces extension of transitional period for dollar disclosure
7 October 2004
ASIC has today issued class order relief [CO 04/1176] to extend the date for compliance with the dollar disclosure regime from 1 January 2005 to 1 March 2005. The class order relief provides Australian financial services licensees (and their representatives) and product issuers with a further two month extension to the transition period and means that they will now need to disclose various fees and benefits as amounts in dollars in statements of advice, product disclosure statements and periodic statements prepared on or after 1 March 2005.
ASIC has said it expects to publish a final policy statement (based on the policy proposal paper issued by ASIC on 10 August 2004) on dollar disclosure in November 2004. This policy statement will specify in what circumstances, if any, ASIC might determine that dollar disclosure is not possible, unreasonably burdensome or contrary to clients' interests.
For further details and to access a copy of the class order, refer to ASIC's website. (For details about the policy proposal paper on dollar disclosure obligations, refer to our Breaking News for 10 August 2004. For a summary of the background to the dollar disclosure regime, refer to our report on this issue.)
ASIC issues consultation paper on relief for managed investment scheme (MIS)
constitutions
1 October 2004
ASIC has today issued a consultation paper, Proposed relief for constitutions of registered managed investment schemes, in which it is seeking comments on its proposal to grant class order relief from current Corporations Act requirements in relation to disclosure of transaction costs in constitutions for registered MISs. The effect of the proposed relief is that a responsible entity will not be in breach of the relevant Corporations Act requirements in cases where it has a discretion under the MIS constitution to determine some components of the consideration to acquire, or the amount payable on withdrawal of, an interest in the MIS.
The release of this consultation paper follows on from earlier interim relief announced by ASIC in July 2004 and ASIC has now announced that the interim relief referred to in its earlier announcement, which was to expire on 31 December 2004, will be extended until 31 March 2005. (This new deadline applies to new applications for relief and also to interim relief granted prior to today's announcement.)
Comments on the consultation paper are due by 30 November 2004. For further details on the consultation paper, refer to ASIC's website. (For background information, refer to our Breaking News for 8 July 2004 and to our reports on this issue.)
ASIC releases version 6 of elicensing and update of pro form licence
conditions
30 September 2004
ASIC has today released version 6 of eLicensing and the AFS Licensing Kit and has reissued pro forma 209 Australian financial services licence conditions (PF 209), which reflect changes to regulatory requirements and ASIC policy (including authorisation to allow new and existing licensees to apply for a licence to provide managed discretionary account (MDA) services to retail clients).
ASIC has confirmed that applicants who have already started an application using version 5 may complete that application using version 5 provided it is lodged with ASIC by 30 October 2004. However, version 6 must be used for existing applications to be lodged after 30 October 2004, new applications and applications requiring any new authorisations only available in version 6.
For further details about the updated elicensing and AFS Licensing Kit and the new PF 209, refer to the ASIC website. Also, for further information about licence authorisations for operators of MDA services, refer to our Breaking News of 9 September 2004.)
ASIC provides relief for client money held in cash common funds
21 September 2004
ASIC today issued a new class order CO 04/1063 - Cash Common Funds to allow Australian Financial Services licensees to pay clients' money into a cash common fund, provided the fund is also a registered scheme under Chapter 5C of the Corporations Act 2001. For further details about the class order relief, refer to ASIC's website.
ASIC welcomes MIAA advertising guidelines
20 September 2004
ASIC today issued a media release saying it welcomes the release of guidelines by the Mortgage Industry Association of Australia (MIAA) to help MIAA members avoid advertising in ways that could mislead consumers in relation to the provision of financial services. Members of the MIAA can get a copy of the guidelines from the MIAA website.
ASIC issues class order relief for financial services guides given in time
critical situations
14 September 2004
ASIC has today issued class order CO 04/1055 to facilitate the provision of a financial services guide in a time critical situation. For further details about the class order relief, refer to ASIC's website.
ASIC announces that operators of managed discretionary accounts services
can apply for licence authorisation
9 September 2004
ASIC today announced that from 30 September 2004, new and existing Australian financial services (AFS) licensees will be able to apply for an AFS licence authorisation to provide managed discretionary account (MDA) services to retail clients. This announcement follows the release of ASIC policy statement 179 Managed discretionary account services in March this year and subsequent announcements by ASIC regarding transitional arrangements applying to MDA services providers.
For further details on the application process, refer to ASIC's website. (For background details and details about the transitional arrangements, refer to our Breaking News for 6 January, 27 May and 11 June this year.)
ASIC issues conflicts management policy
30 August 2004
ASIC has today released Policy Statement 181 Licensing: Managing conflicts of interest (PS 181), which sets out how it expects financial services licensees to manage their conflicts of interest. PS 181 is based on the new conflicts management obligation for licensees imposed by CLERP 9, which takes effect from 1 January 2005. ASIC also announced today that it will issue further separate guidance by October on conflicts management requirements for research report providers.
For further details about PS 181, refer to ASIC's website.
ASIC announces ongoing licensing relief for securitisation special purpose
vehicles and releases consultation paper
17 August 2004
ASIC has today announced that it will continue to grant limited ongoing class order licensing relief (under amended class order CO 03/1098 Securitisation special purpose vehicles and securitisation managers) for special purpose vehicle issuers (SPVs) of debentures or interests in a managed investment scheme, generally in circumstances where the SPV is created for the sole purpose of effecting a single securitisation transaction. ASIC has extended the interim relief under the class order from 30 September 2004 until 31 March 2005.
ASIC has also released a consultation paper outlining its proposals for ongoing relief for SPVs. Comments on the paper are due by 17 September and ASIC is aiming to finalise its policy by late October or early November. For further details about the class order relief and to access a copy of ASIC's consultation paper, refer to ASIC's website.
ASIC issues policy proposal paper on dollar disclosure obligations
10 August 2004
Following on from the announcements made by the Government and ASIC on 25 June 2004 about the new dollar disclosure regulations and ASIC's role in their implementation (refer to our Breaking News for 25 June below for further details), ASIC has today issued a policy proposal paper, Dollar disclosure - ASIC policy proposal.
The policy proposal paper sets out how ASIC plans to approach the dollar disclosure provisions and how it proposes to use its power under the new regulations to make dollar disclosure determinations.
Comments on the policy paper are due by 7 September and ASIC has announced it plans to issue a final policy statement in October or November this year. For further details about ASIC's policy and for a copy of the policy proposal paper, refer to ASIC's website.
ASIC provides relief for agency banking services
27 July 2004
ASIC has today issued class order [CO 04/909] to assist Australian authorised deposit-taking institutions (ADI) that use agents to provide their banking services under the Corporations Act 2001 (the Act) in relation to basic deposit products. The new class order allows agents appointed by an ADI to arrange for the issue of a basic deposit product without the need to be licensed or to be formally appointed as an authorised representative under the Act. However, the ADI will be responsible for ensuring that their agents satisfy all relevant legislative and regulatory conduct and disclosure requirements. In order to be able to take advantage of the class order, the ADI needs to provide ASIC with written notice of its intention to rely on the relief. For further details about the relief and to access a copy of the class order, refer to ASIC's website.
ASIC issues further guidance on statements of advice
21 July 2004
ASIC has today announced two initiatives in relation to statements of advice (SOAs):
The release of a new class order, [CO 04/576] Statements of Additional Advice, which is intended to facilitate shorter SOAs where the adviser has an ongoing relationship with the client. The class order provides relief to permit SOAs to 'incorporate by reference' specified information that the client has already received in a previous SOA.
Further guidance on how it expects licensees (and their representatives) to prepare SOAs, which is intended to complement earlier guidance issued by ASIC as part of its implementation of FSR and to assist industry in producing SOAs that are clear, concise and effective, as required under the Corporations Act.
ASIC announces interim class order relief for payments into insurance
brokers section 981B accounts
9 July 2004
ASIC today announced interim class order relief (class order [CO 04/673]) (until June 2005) that permits licensed insurance brokers to pay other (non-client) monies that are received in a single payment together with client monies into a trust account established and maintained under section 981B of the Corporations Act 2001. The class order revokes class order [CO 04189], which was issued in March this year.
For details about the class order and the conditions of the interim relief, refer to ASIC's website.
ASIC announces interim position on transaction costs for managed
investment scheme constitutions
8 July 2004
ASIC announced today its interim position on transaction costs for registered managed investment scheme constitutions. Until 31 December 2004, ASIC will consider granting relief for new scheme constitutions on a case by case basis (and will take no action in relation to constitutions of existing schemes) in relation to the requirement for the scheme's constitution to contain a mechanism that is 'certain, complete and independently verifiable' for calculating the transaction costs component of the price of an interest in the scheme. It will be a condition of the relief that the basis for calculating the transaction costs be disclosed in the product disclosure statement for the scheme.
For further details of ASIC's announcement and how to apply for relief, refer to ASIC's website.
Regulations (Batch 8 - dollar disclosure) are finalised and ASIC releases
information about the next steps on dollar disclosure
25 June 2004
The Government has now released the final version of the dollar disclosure regulations, Corporations Amendment Regulations 2004 (No 6), which are dated 24 June 2004 and received assent today. Under these regulations, licensees and their representatives and product issuers are obliged from 1 January 2005 to disclose various fees, benefits, costs and interests as amounts in dollars in statements of advice, product disclosure statements and periodic statements. However, these matters need not be disclosed as amounts in dollars where ASIC makes a determination that, for a compelling reason, dollar disclosure is not possible, unreasonably burdensome or contrary to client interests.
To assist those affected by the new regulations, ASIC has today issued a media release on its role in implementing the regulations. ASIC has said that it plans to release a policy proposal paper within the next few months outlining how it proposes to use its power to make dollar disclosure determinations.
For details on the background to these regulations, refer to our Breaking News for 2 June 2004 and 16 June 2004. You might also be interested in our report on this issue.
Government releases details of reforms for simplified disclosure of fees
and charges
16 June 2004
The Government today released details of its proposed reforms to improve and simplify the disclosure of fees and charges by superannuation funds (and other investment based products, such as managed investment schemes). This is to be achieved by requiring additional information to be disclosed in product disclosure statements and periodic statements. It is anticipated these new measures will be introduced progressively between 1 January 2005 and 1 July 2005 to ensure industry participants have sufficient time to make necessary changes to their internal processes and disclosure documents.
The Government is currently developing regulations to implement these reforms, which will then be released for public comment.
ASIC releases revised fee disclosure model
16 June 2004
ASIC has today released a revised version of the good practice model for fee disclosure in product disclosure statements for investment products. The original version, which was part of a report called A model for fee disclosure in product disclosure statements for investment products: An ASIC Report, was released in August 2003 (refer to our Breaking News for 5 August 2003 for details). For further details about the revised model and its implementation by product issuers, refer to ASIC's website.
ASIC grants extension of transitional period for managed discretionary
account service providers
11 June 2004
ASIC today announced that the transitional arrangements for managed discretionary account service providers under class order CO 04/194 (as amended by CO 04/612), which accompanies ASIC's policy statement PS 179 (Managed discretionary account services), have been extended until 10 December 2004. For further details on the requirements of PS 179 and the transitional arrangements, refer to ASIC's website and to our Breaking News for 15 March 2004 and 27 May 2004.
ASIC releases research report on soft dollar benefits
10 June 2004
ASIC has today released a research report, Disclosure of soft dollar benefits, which reports on the types of benefits (other than standard commission payments) offered to financial planning firms and how they are disclosed to clients.
For further details about the report and proposed future action by ASIC on this issue, refer to ASIC's website.
Government releases proposed amendments to the Corporations Regulations
and the Payment Systems and Netting Regulations
8 June 2004
The Government has released proposed amendments to the Corporations Regulations 2001 (Cth) and the Payment Systems and Netting Regulations 1998 (Cth) to give effect to matters affecting market and clearing and settlement facility licensees which have arisen since the end of FSR transition.
The proposed amendments reflect variations made to licences held by some market and clearing and settlement facility licensees at the end of the FSR transition period and also recognise that both the ASX and SFE groups have been restructured since the initial FSR regulations were made.
Comments on the proposed regulations are due by 23 July 2004.
Parliamentary Committee reports on FSR Regulations
2 June 2004
The Parliamentary Joint Committee on Corporations and Financial Services has tabled in the House of Representatives its report on FSR regulations 7.1.29A, 7.1.35A and 7.1.40(h) (which are concerned with excluding a limited range of activities conducted by lawyers and recognised accountants from the FSR licensing requirements). This report follows on from the report released in March 2004 on Corporations Amendment Regulations 2003 (Batch 6); Corporations Amendment Regulations 2003/04 (Batch 7) and Draft Regulations - Corporations Amendment Regulations 2004 (Batch 8). For further details on the earlier report, refer to our Breaking News for 24 March 2004.
In summary, the Committee considers regulations 7.1.35A and 7.1.40(h) dealing with lawyers' activities are appropriate as currently drafted. However, the Committee has recommended that regulation 7.1.29A, which currently exempts recognised accountants from the FSR licensing requirements in relation to making recommendations about acquiring or disposing of self managed superannuation fund products, should be more limited and only apply to general advice on superannuation fund structures (but not to advising on specific superannuation funds, fund performance or a person's investment strategy in a fund).
Government releases revised draft Corporations Amendment Regulations
(Batch 8 - dollar disclosure)
2 June 2004
The Government has released for public consultation a revised draft of proposed amendments to the Corporations Regulations that require the disclosure of fees and charges in dollar terms in statements of advice, product disclosure statements and periodic statements. (For details of the earlier draft of these regulations, refer to our Breaking News for 7 January 2004.)
The Government intends that the amending regulations will be in place by 1 July 2004 (to coincide with the commencement date of the new dollar disclosure obligations under the Corporations Act) and will be subject to a transitional period ending on 1 January 2005. Comments on the draft regulations are due by 10 June 2004.
ASIC releases new policy on foreign collective investment schemes
31 May 2004
ASIC today released a new policy statement, PS 178: Foreign Collective Investment Schemes, and related class orders, which ASIC says are designed to facilitate access to cross-border financial services while ensuring that protection for Australian investors is not compromised.
The new policy, which replaces an earlier policy statement issued by ASIC in 1993 (PS 65), provides relief for both:
- operators of collective investment schemes that are authorised in other jurisdictions (FCISs) and want to operate in Australia; and
- responsible entities of Australian-registered schemes that want to invest scheme property in unregistered FCISs overseas.
For further details about the new policy, refer to ASIC's website.
ASIC reminds operators to comply with transitional arrangements for
managed discretionary account services
27 May 2004
ASIC today issued a media release reminding existing operators of managed discretionary account services that they must comply with the transitional arrangements under policy statement 179 (Managed discretionary account services). This includes obtaining an Australian financial services licence authorisation to provide such services by 10 December 2004. For further details on the requirements of PS 179 and the transitional arrangements, refer to ASIC's website.
ASIC warns training courses must comply with PS 146
24 May 2004
ASIC today issued a media release warning FSR licensees to check that the training they provide to their authorised representatives complies with ASIC policy statement 146 - Licensing: Training of financial product advisers. PS 146 sets out minimum training standards for people who provide financial product advice to retail clients. Under PS 146, FSR licensees must ensure that their authorised representatives complete appropriate training courses listed on the ASIC Training Register or are individually assessed by an authorised assessor. For further details on training requirements, refer to ASIC's website.
Fee disclosure regulations - disallowance rescinded
13 May 2004
Further to its resolution on 24 March 2004 to disallow regulations in the Corporations Amendment Regulations 2003 (No 8) (Cth) relating to disclosure of fees by superannuation funds in statements of advice, product disclosure statements and periodic statements, the Senate on 13 May 2004 rescinded that resolution for disallowance.
ASIC grants relief for debt factoring arrangements
4 May 2004
ASIC has today issued class order CO 04/239: Factoring arrangements - licensing, hawking and disclosure relief granting relief to people providing debt factoring services (or advising on them) from the requirement to hold an Australian Financial Services Licence and from the product disclosure and hawking provisions of the Corporations Act 2001.
ASIC provides guidance on superannuation calculators
4 May 2004
ASIC has today provided some general guidance on the application of the FSR licensing regime to providers of superannuation calculators. ASIC considers that merely providing a superannuation calculator does not mean the provider will always need an AFS licence or authorisation under the Corporations Act 2001. ASIC's guidance sets out the circumstances where ASIC considers superannuation calculators might be provided without a licence or authorisation (and where a licence or authorisation is more likely to be required).
For further details, refer to the guidance on ASIC's website.
ASIC releases guide on disclosing the impact of international accounting
standards
22 April 2004
ASIC today released a guide on disclosing in offering documents the impact of International Financial Reporting Standards (IFRSs) being adopted as Australian accounting standards on financial information. The new IFRSs will apply to financial reports prepared under the Corporations Act for financial years commencing on or after 1 January 2005.
ASIC releases new and updated compliance commentaries
15 April 2004
ASIC has today released five compliance plan commentaries as practical guidance for operators of managed investments schemes in meeting their compliance obligations under Chapter 5C of the Corporations Act 2001. ASIC has developed the commentary papers to assist industry members who may be revising their compliance plans to reflect new obligations under FSR. The new commentaries relate to pooled mortgage and contributory mortgage schemes and the revised commentaries cover agricultural industry schemes, financial asset schemes and property schemes.
ASIC releases results of preferential remuneration report
7 April 2004
ASIC has released the results of a surveillance project it conducted during the 2002-03 financial year (prior to the introduction of FSR) into payments of preferential remuneration by institutions to their financial advisers. While ASIC found there were deficiencies in the way that some financial advisers were disclosing information about remuneration and recording advice in relation to recommendations about 'in house' products, ASIC considers the FSR disclosure and record-keeping requirements now in force address many of those deficiencies. For further information about ASIC's findings and to access a copy of the report, refer to ASIC's website.
Overview of ASIC's implementation of the FSR Act
29 March 2004
ASIC today provided an overview of key data and other information relating to its implementation of the Financial Services Reform Act 2001, following the end of the two-year transition period on 10 March 2004. The overview is intended to provide industry participants and other interested parties with some statistical results and a summary of the documentation issued by ASIC during the transition period. For further details, refer to ASIC's website.
ASIC clarifies category of wholesale clients
25 March 2004
ASIC has issued the following two class orders to clarify some regulatory requirements applying to wholesale clients in the Corporations Act 2001.
- [CO 04/150]: Wholly owned subsidiaries of professional investors expands the category of wholesale investors under FSR to include wholly-owned subsidiaries of 'professional investors'. This relief, which is only interim, applies between 2 March 2004 and 31 December 2005.
- [CO 04/173]: Qualified accountant - amendment amends class order [CO 01/1256] to recognise some foreign accountants as 'qualified accountants', enabling them to issue certificates to allow an investor to be regarded as a wholesale or sophisticated investor for FSR purposes. This class order took effect from 2 March 2004.
ASIC's approach to regulation of FSR: breach notification and disclosure
25 March 2004
ASIC today announced it will be taking a 'practical' approach to regulating the new FSR regime, particularly in the areas of licensing and disclosure. In particular, ASIC recognised that there are still areas of uncertainty, especially in relation to disclosure and reporting of breaches and has confirmed it will be issuing further guidance for FSR licensees on notification of breaches to ASIC in the coming months.
Parliamentary Committee reports on fee disclosure
24 March 2004
The Parliamentary Joint Committee on Corporations and Financial Services has tabled in the House of Representatives its report on Corporations Amendment Regulations 2003 (Batch 6); Corporations Amendment Regulations 2003/04 (Batch 7) and Draft Regulations - Corporations Amendment Regulations 2004 (Batch 8). The Committee has identified key elements it believes are needed for a common fee disclosure model to enable investors to compare financial products.
Corporations Regulations on superannuation fee disclosure disallowed by
the Senate
24 March 2004
The Federal Opposition successfully moved a motion in the Senate today to disallow regulations made under the Corporations Amendment Regulations 2003 (No 8) relating to the disclosure of fees and charges for superannuation funds and retirement savings accounts. These regulations were gazetted in November 2003 and were due to take effect from 1 July this year. The Government is currently working with industry to make new rules in this area.
ASIC grants temporary relief to additional law
societies during period of consultation
22 March 2004
Following on from temporary class order relief provided to law societies and other service providers in December 2003, ASIC announced today that it has published two new class orders [CO 03/1094 and CO 03/1095] extending the temporary relief under the earlier class orders to additional law societies (or their associated entities). For details of the earlier class orders and the nature of the relief, refer to our Breaking News for 23 December 2003.
ASIC class order relief for insurance brokers
16 March 2004
ASIC has today issued a class order which provides limited relief to insurance brokers by allowing other money, paid in a single sum together with client money, to be paid into a trust account established and maintained by a licensed insurance broker under section 981B of the Corporations Act.
ASIC releases new policy statement on regulation of discretionary account
services
15 March 2004
Following on from its announcement on 6 January this year, ASIC has now released policy statement, PS 179 'Managed discretionary account services' and related class orders. (For further details about the policy, refer also to our Breaking News for 6 January.)
ASIC releases version 5 of eLicensing and AFS Licensing Kit
11 March 2004
Further to its announcement on 9 February, ASIC today released version 5 of the eLicensing system and an updated version of the AFS Licensing Kit. These latest versions take into account the end of the transitional period under FSR and must be used for new applications (ie, applications commenced from today) for an Australian financial services licence. (Applicants who have begun the licence process (but not lodged their application) before 11 March may still use the earlier version of elicensing but their application must be lodged with ASIC by 10 April. Refer to ASIC's website for further details.)
Transition period ends
11 March 2004
The transitional period for the Financial Services Reform Act has ended. From today, anyone who conducts a financial services business or operates a financial market will generally need to be licensed under the FSR laws. If you have any queries or concerns about FSR, feel free to contact a member of our FSR team.
We have updated our FSR website to focus on ongoing issues, including compliance with licensing requirements and the disclosure regime. Our 'Breaking News' section will continue to provide information on the latest developments.
ASIC amends securitisation class order
10 March 2004
ASIC today issued amending class order CO 04/231 which extends the temporary FSR licensing relief (currently available until 30 September 2004) available to entities involved in securitisation transactions to securitisation products that are interests in managed investment schemes as well as to debt instruments. (For further details on the original class order (CO 03/1098), refer to our Breaking News for 23 December 2003.)
Government announces single fee disclosure for investment based financial
products
10 March 2004
The Government today announced that it will be introducing new regulations by 1 July 2004 to simplify disclosure for investment based financial products. The proposed new regulations will require affected funds (such as superannuation funds) to disclose their fees as a single figure, which will enable consumers to compare management fees for different funds.
Regulations (batch 7) receive assent
26 February 2004
The Governor-General has given assent to the Corporations Amendment Regulations 2004 (No 2). These regulations were released in draft on 24 December 2003 and are dated 19 February 2004.
ASIC issues guidelines for interim relief for loyalty schemes and low
value non-cash payment facilitates
24 February 2004
ASIC has today provided some guidance on interim licensing and disclosure relief that it is willing to consider for loyalty (or reward) schemes that constitute a non-cash payment facility and for low value non-cash payment facilities. The interim relief applies until 30 June 2005 and in the interim, ASIC intends to consult with the Federal Government to consider technical aspects of the application of the FSR licensing and disclosure regime to these facilities and schemes (including a consideration of practical compliance problems and whether any permanent ongoing relief is appropriate).
ASIC has announced that it intends to finalise any position with industry as early as possible before the end of the interim relief period.
ASIC extends transitional relief on Australian financial service licence
requirements for product disclosure statements
18 February 2004
ASIC has announced transitional class order relief for AFS licensees from the obligation under section 912 of the Corporations Act 2001 to cite their AFS licence numbers on PDS documentation in circumstances where that documentation is printed and available for distribution before the licensee is granted an AFS licence and the licence is granted before 11 March 2004.
Practical guidance for wholesale foreign financial services providers
seeking licensing relief
17 February 2004
ASIC has issued further practical guidance for wholesale foreign financial services providers seeking to rely on the class order relief (contained in a number of class orders issued by ASIC under ASIC PS 176: Licensing: Discretionary Powers wholesale foreign financial services providers in December 2003) from the requirement to hold an Australian financial services licence. For further information about the December 2003 class orders, refer to our Breaking News for 23 December 2003. ASIC has also made some minor amendments to the December 2003 class orders (in class order CO 04/0100).
FSR relief for self-managed superannuation funds
11 February 2004
The Treasurer has announced that a new regulation will be made to provide relief for 'recognised accountants' under the FSR regime who provide advice to their clients on the decision to acquire or dispose of an interest in a self-managed superannuation fund. The regulation is proposed to take effect from the end of February 2003.
ASIC announces changes to eLicensing application
9 February 2004
With the FSR transition period ending on 10 March, ASIC announced today that it will release version 5 of its eLicensing kit for Australian financial services (AFS) licence applications on 11 March. Version 5 will differ from the previous versions by not including questions relating to streamlining or composite assessment processes, which are not applicable after the transition deadline. For more information about the proposed changes to eLicensing and the implications for current AFS licence applications, refer to ASIC's website*.
*Please note link to original document no longer available.
ASIC extends statement of advice exemption for some overseas listed
products
28 January 2004
ASIC has provided class order relief [CO 04/10] to allow retail advice related to some financial products traded on approved foreign markets to be provided without a Statement of Advice (SoA) being given. The Corporations Act 2001 already contains an existing exemption from the SoA requirements for further market related advice about transactions on licensed markets in Australia. This existing exemption requires that an earlier SoA is given to the client and that there are no significant changes to the personal circumstances of the client between the time of the initial SoA and the subsequent advice. ASIC has decided to extend this exemption to further market related advice about some financial products able to be traded on approved overseas financial markets (including the London, New York, Singapore and Hong Kong stock exchanges).
Government releases further FSR regulations (Batch 8)
7 January 2004
The Government has released proposed amendments to the Corporations Regulations that require the disclosure of certain items in dollar terms contained in statements of advice, product disclosure statements and periodic statements. The amendments have been proposed as a result of the commitment given by the Government on 5 December 2003 in the Senate during debate on the Financial Services Reform Amendment Bill 2003.
The proposed amendments to the regulations affect amendments contained in Schedule 3 of the Corporations Amendment Regulations 2003 (No 8). The proposed amendments are not scheduled to commence until 1 July 2004, consistent with the operation of Schedule 3.
ASIC policy approach to the regulation of managed discretionary account
services
6 January 2004
ASIC announced today that it has finalised its policy approach to the regulation of managed discretionary account services. Under the final policy, operators of MDA services are exempted from the managed investments provisions and the product disclosure provisions of the Corporations Act. To have the benefit of this relief, MDA operators must comply with the licensing and conduct provisions in Parts 7.6 and 7.7 of the Corporations Act and some additional conduct requirements designed to promote consumer protection.
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