For the latest FSR news, see our Breaking News page.
ASIC provides guidance on superannuation advice to employers
22 December 2005
ASIC has today released QFS 160 Are employers retail clients in relation to financial product advice about employer 'default' funds under super choice?, which is aimed at providing guidance to corporate superannuation advisers to assist them in complying with their obligations as Australian Financial Services licensees when providing advice to employers. The release of QFS 160 responds to industry requests for guidance (particularly in light of the introduction of superannuation choice on 1 July, 2005 and Australian Prudential Regulation Authority licensing requirements).
ASIC has also noted that it is currently conducting nation-wide surveillance to monitor the advice that superannuation trustees, licensed advisers and tender consultants give employers when they seek information about superannuation.
For further information about the release and application of QFS 160, refer to ASIC's website.
ASIC issues latest report on relief applications from financial services
providers
21 December 2005
ASIC has today released a report outlining 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 1 May and 31 August 2005, 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. (For details of previous update reports issued by ASIC, refer to our Breaking News for 21 December 2004, 11 May 2005 and 26 July 2005.)
ASIC releases policy on generic calculators
20 December 2005
ASIC has today released its policy on the regulation of generic financial calculators (which is set out in (a new) section F of Policy Statement 167 Licensing: discretionary powers) and issued class order CO 05/1122 Relief for providers of generic calculators to give effect to the policy. This follows on from the release of ASIC's consultation paper 'Online Calculators' in August 2005. Under the terms of the relief, providers of generic financial calculators will not require an Australian Financial Services licence with an advice authorisation or, if already licensed, will not need to meet the conduct and disclosure requirements in Part 7.7 of the Corporations Act 2001 subject to some conditions set out in the class order.
ASIC is still considering its policy regarding other types of calculators such as product-specific calculators and risk-profilers and is likely to consult further with industry before finalising other such policies.
For further details on the policy and class order relief from generic calculators (and to access copies of the relevant documentation), refer to ASIC's website. (For information about the earlier consultation paper released by ASIC on this issue, refer to our Breaking News for 23 August 2005.)
FSR refinement regulations registered
19 December 2005
The Corporations Amendment Regulations 2005 (No 5) have now been registered in the Federal Register of Legislative Instruments. These regulations follow on from the release of the Government's proposals paper Refinements to Financial Services Regulation on 2 May 2005 and are designed to implement the proposed refinements which require changes to the law.
(For further details on the background to these regulations, refer to the Treasury website and to our Breaking News for 11 October 2005.)
ASIC provides ongoing licensing relief for credit rating agencies
19 December 2005
ASIC has today announced ongoing class order relief (CO 05/1230 Credit Rating Agencies) which conditionally exempts Moody's Investors Service Pty Limited, Standard & Poor's (Australia) Pty Limited, Fitch Australia Pty Limited and Rapid Ratings Pty Limited from the FSR licensing requirements where they provide financial product advice in the form of credit ratings.
CO 05/1230, which takes account of feedback received in response to ASIC's consultation paper Licensing: Credit rating agencies released by ASIC on 9 June this year, applies where these credit rating agencies:
- provide credit ratings as part of their ordinary course of business;
- include appropriate warnings with their credit ratings;
- comply with paragraph 4.1 of the International Organisation of Securities Commissions' Code of Conduct Fundamentals for Credit Rating Agencies; and
- give ASIC information about their credit ratings business on request.
This class order commences on 31 December 2005 and replaces the earlier class order (CO 03/1093) issued by ASIC. ASIC has announced that it will also consider applications for relief from other credit rating agencies able to comply with the conditions of CO 05/1230 on a case-by-case basis.
To obtain a copy of the class order and find out further details about its application, refer to the ASIC website. For further information about the earlier consultation paper and class order relief, refer to our Breaking News for 9 June 2005.
ASIC announces class order relief for oral general advice
30 November 2005
ASIC has today announced class order relief, CO 05/1195 Simplified warning for oral general advice, for providers of general financial product advice. Under the terms of the new class order relief, product providers dealing with retail clients are now able to give:
- a shorter, simpler warning than the prescribed kind otherwise required to be given under the Corporations Act;
- the new simplified warning only once in any telephone conversation or face-to-face meeting where general advice is provided to a retail client.
The new class order relief follows on from the consultation paper released by ASIC in August this year on proposed relief to reduce the repetition of the general advice warning while minimising consumer confusion about what kind of advice they are getting. The consultation paper was the second step in ASIC's project implementing Refinement Proposal 5.1 of the Federal Government's proposals paper Refinements to Financial Services Regulation (which was released on 2 May 2005). The release of CO 05/1195 now completes ASIC's work on Refinement Proposal 5.1. (Note that this latest relief applies to Australian financial services licensees and their authorised representatives. It does not relate to arrangements made with distributors of general insurance products under the terms of class order CO 05/1070, which was issued by ASIC in October 2005.)
For further details, refer to ASIC's media release and the class order, which can be accessed from ASIC's website. For further details about ASIC's earlier consultation on this issue, refer to our Breaking News for 31 August 2005. For information about the application of CO 05/1070, refer to our Breaking News for 27 October 2005.
ASIC releases updated version of the AFS licensing kit
24 November 2005
ASIC has today released an updated version (version 7) of the Australian financial services (AFS) licensing kit, which ASIC says will reduce the amount of paperwork required to be submitted as part of an application for an AFS licence by requiring, in most cases, a maximum of four documentary proofs to accompany an initial AFS licence application.
The updated AFS licensing kit is divided into three parts, as follows:
- Part 1 explains how to apply for a licence, and how to later apply for a variation to it;
- Part 2 covers technical issues applicants will encounter when completing their licence or variation application and also identifies the core proofs that must be provided by all applicants when they lodge their application with ASIC; and
- Part 3 explains any additional proofs that ASIC may subsequently request be provided.
ASIC has confirmed that anyone who has a current licence application lodged with ASIC or who is in the process of finalising their application will not need to resubmit or change their application as ASIC will make any necessary changes internally and contact applicants if it requires additional information.
For further details, refer to ASIC's website.
ASIC releases its policy on regulation of non-cash payment facilities
15 November 2005
ASIC has today released its new policy on the regulation of non-cash payment (NCP) facilities under the Corporations Act, PS 185: Non-cash payment facilities (PS 185). PS 185 outlines the general approach that ASIC will take in regulating NCP facilities, including the factors that it will take into account in considering applications for individual or class order relief. It also describes the associated class order relief ASIC has granted to:
- low value NCP facilities under class order CO 05/736;
- gift vouchers or cards under class order CO 05/738;
- prepaid mobile phone accounts under class order CO 05/740;
- loyalty schemes under class order CO 05/737; and
- electronic road toll devices under class order CO 05/739.
The release of PS 185 completes one of ASIC's eight projects implementing the Australian Government's proposals paper Refinements to Financial Services Regulation (released on 2 May 2005).
For further details about PS 185 (including to access a copy of the policy statement and the class orders) and to find out more about the transitional relief that was granted by ASIC prior to finalisation of its policy on NCP facilities, refer to ASIC's website. For more details about the Government's financial services refinement proposals, refer to our Breaking News for 2 May 2005.
APRA and ASIC release guide to good practice in unit pricing
3 November 2005
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have today jointly released a guide to good practice in unit pricing for the life insurance, superannuation and funds management industries. The guide, Unit Pricing - Guide to good practice, outlines a range of good practices and has been developed following a joint review by APRA and ASIC of unit pricing practice and also based on industry submissions on a draft consultation paper issued by APRA and ASIC in December 2004.
APRA and ASIC have said they will continue to review aspects of unit pricing practice as a part of ongoing regulatory monitoring and expect that product providers will follow the good practices described in the guide.
For further details and to access a copy of the guide, refer to ASIC's website.
ASIC offers general insurance dealers choice on how to appoint their
distributors
27 October 2005
ASIC has today announced class order relief, CO 05/1070 General insurance distributors, for Australian financial services licensees from the authorisation requirements for distributors of general insurance products. The class order has been issued as part of ASIC's response to the Federal Government's proposals paper Refinements to Financial Services Regulation (released on 2 May 2005). Under the terms of the class order, licensees will have the option to appoint people to deal in general insurance products on their behalf, without having to appoint them as authorised representatives. The licensee will be responsible for the activities of distributors they appoint and the distributors must tell retail clients who they act for, what remuneration they get and how retail clients can access the licensee's dispute resolution system. The release of CO 05/1070 completes ASIC's work on the Government's refinement proposal 12.2.
To access a copy of the class order and find out further details about its application, refer to ASIC's website. (For further information about the Government's proposed financial services refinement and the earlier consultation paper released by ASIC on authorisation requirements for general insurance arrangers, refer to our Breaking News for 2 May 2005 and 4 August 2005.)
Government seeks comment on draft FSR refinement regulations
11 October 2005
Following on from the release of the Government's proposals paper, Refinements to Financial Services Regulation on 2 May 2005, the Government has today released an exposure draft of the Corporations Amendment Regulations (and accompanying explanatory materials) designed to implement the proposed refinements which require changes to the law.
The closing date for submissions on the draft regulations is 4 November 2005. For further details and to obtain a copy of the draft regulations and accompanying materials, refer to the Treasury website. For further details on the Government's proposals paper, refer to our Breaking News for 2 May 2005.
ASIC gives relief for unsolicited offers to acquire shares in a foreign
company
10 October 2005
ASIC has today granted class order relief under the Corporations Act to those making unsolicited offers to holders of shares in a foreign company under a foreign regulated takeover bid.
ASIC class order [CO 05/850] gives relief from disclosure provisions of the Corporations Act that regulate the making of unsolicited offers to purchase financial products off-market (Div 5A of Part 7.9). The provisions require that unsolicited offers include the following information:
- if the financial products are quoted, the market price of the financial product; or
- if the financial products are unquoted, a fair estimate of the value of the financial product as at the date of the offer and an explanation of the basis on which the estimate was made.
The new class order extends relief to takeover bids in specific countries, which ASIC considers have takeover regulation (particularly disclosure requirements) comparable to Australian takeover regulation (although ASIC may give case-by-case relief for a takeover bid regulated in another jurisdiction if the applicant satisfies ASIC that the takeover is subject to regulation (particularly disclosure requirements) comparable to Australian regulation).
It is also a condition of the relief that the foreign takeover bid must involve an offer to all holders of securities in the foreign company in the same class.
For further details and to access a copy of the class order, refer to ASIC's website.
ASIC releases new version of in-use notice
3 October 2005
ASIC has today released a new version of the FS 53 PDS in-use notice form. The updated form now includes a second part that deals with the provision of superannuation fee data by trustees of regulated superannuation funds for publication on ASIC's FIDO (consumer) website. The collection and publication of this information is designed to assist consumers when they are comparing funds and is part of the Federal Government's commitment to monitor and report on superannuation fees for at least the first five years following the introduction of the 'Choice of Superannuation Fund' legislation, which came into effect on 1 July this year.
For further details, refer to the ASIC website.
ASIC provides further answers on some fees and costs questions
26 September 2005
ASIC has today issued an information release setting out answers to the following five questions about the Corporations Amendment Regulations 2005 (No 1) (the Regulations), which were made on 10 March 2005 and require, among other things, product disclosure statements for investment-linked financial products to include a standardised fees and costs template, an example of annual fees and costs for a balanced or similar fund, and a boxed consumer advisory warning.
- How far do product issuers need to go in obtaining information for the purposes of disclosing management costs and the indirect cost ratio (ICR)?
- How do product issuers comply with the requirement to include estimated
performance fees in assessing management costs and the ICR?
What information should the fees and costs template contain when there are multiple investment options? - What balanced fund information do product issuers need to disclose when there is more than one balanced investment option?
- How current does information need to be for calculating the ICR?
The answers to these questions are set out in the attachment to ASIC's information release. For details and to access the information release and also earlier guidance that ASIC has provided in relation to implementing the obligations imposed by the Regulations, refer to ASIC's website.
For further details about the Regulations, refer to our Breaking News for 10 March 2005 and also to our report summarising the fee disclosure requirements and our article on the differences between fee and dollar disclosure requirements under FSR.
ASIC releases progress report on its financial services refinements
projects
12 September 2005
ASIC has today released a progress report on the eight projects it is undertaking as part of the Australian Government's Refinements to Financial Services Regulation (which was issued on 2 May 2005).
ASIC's report confirms that it has met all delivery deadlines so far, is on schedule for remaining proposed deadlines and, in the coming months, will release:
- a policy statement on non-cash payment facilities and any accompanying relief (scheduled for September);
- its final position on authorisation requirements for distributors of general insurance products (scheduled for October);
- relief and/or guidance to reduce unnecessary repetition of the general advice warning in an ongoing relationship (scheduled for November); and
- relief and/or guidance for providers of on-line calculators other than superannuation calculators (scheduled for November).
(You may also be interested in our recent report summarising ASIC's eight projects and their status.)
ASIC reviews transaction fee disclosure by banks, building societies and
credit unions
7 September 2005
ASIC has today issued a report, Good transaction fee disclosure – An ASIC report, on disclosure of transaction fees by banks, building societies and credit unions. The release of this report follows the release of ASIC's Guide to Good Transaction Fee Disclosure for Bank, Building Society and Credit Union Deposit and Payments Products (Transaction Accounts), issued in June 2002, which is a reference for institutions and consumers and takes account of the disclosure requirements introduced under FSR as well as applicable codes of practice and ASIC policy.
The ASIC report indicates what information consumers are receiving from their financial institutions about fees, when they are receiving it and also describes approaches to transaction fee disclosure by banks, building societies and credit unions.
For further details about the release of the report, refer to ASIC's website and for background information about the release of the ASIC guide, refer to our Breaking News for 26 June 2002.
ASIC consults on proposal to reduce repetition of the general advice
warning
31 August 2005
ASIC has today released a consultation paper inviting comment on proposed relief that would reduce the need for Australian financial services licensees and their representatives to repeat the general advice warning (GAW) to retail clients who have heard it before.
ASIC's proposed relief will permit an adviser to give a short reminder to a retail client who has heard the GAW before (instead of giving the GAW). However, if the retail client doesn't understand the reminder, the adviser cannot rely on the relief and must give the GAW. The consultation paper is the second step in implementing Refinement Proposal 5.1 of the Federal Government's proposals paper Refinements to Financial Services Regulation (which was released on 2 May 2005) on GAWs. (The first step was the guidance issued in ASIC QFS 157. Do I need to follow the exact wording in the Corporations Act when I give a general advice warning?, which was released by ASIC on 5 August 2005.)
Comments on the consultation paper are due by 26 September 2005.
For further details and to access a copy of the consultation paper and ASIC QFS 157, refer to ASIC's website.
ASIC publishes example statement of advice
31 August 2005
ASIC has today published an example statement of advice (SOA) (with a guide that explains how and why ASIC developed the example SOA) illustrating ASIC's interpretation of clear, concise and effective advice and disclosure in a specific financial advice scenario. The example SOA was developed (in consultation with financial planning experts) on the basis of a hypothetical financial planning scenario and deals with personal advice about personal insurance, investing in managed funds and basic deposit products.
ASIC is looking to industry to produce other example SOAs in specific areas such as advice on establishing a share portfolio, a 'whole of life' financial plan and an SOA focused on superannuation issues. ASIC says it may release further example SOAs, depending on the extent to which industry engages in this process.
For further information and to access a copy of the SOA and accompanying guide, refer to ASIC's website.
ASIC revises guidance on training standards for advisers on basic deposit
products and related non-cash payment products
31 August 2005
ASIC has released an updated version of Policy Statement 146 Licensing: Training of financial product advisers (PS 146), which sets out the minimum training standards for people providing financial product advice to retail clients. The revised PS 146 contains updated guidance on the training requirements for advisers on basic deposit products and related non-cash payment products, as well as some other amendments to reflect changes in the law since the policy statement was first released.
For further details (including to access a copy of the updated PS 146), refer to ASIC's website.
ASIC grants relief for advertising by product issuers
31 August 2005
ASIC has today announced class order relief (CO 05/835) for product issuers who provide general financial product advice in advertisements.
ASIC recognises that the requirements applying to licensed and unlicensed product issuers who provide general financial product advice in advertisements are currently inconsistent. The effect of CO 05/835 is that no financial services guide or general advice warning will be required where product issuers give general financial product advice in advertisements in the media or on billboards or posters. Instead, product issuers need only:
- include a statement in their advertisement that a person should consider whether the financial product is appropriate for them; and
- comply with the advertising disclosure requirements in sections 1018A or 734 of the Corporations Act 2001 (as applicable to the kind of offer document).
For further details and to access a copy of CO 05/835, refer to ASIC's website.
ASIC consults on proposed relief and guidance for online superannuation
calculators
23 August 2005
ASIC has today released a consultation paper inviting comment on proposed relief and guidance for providers of online calculators.
The consultation paper was issued as part of ASIC's response to the Government's proposed Refinements to Financial Services Regulation (released on 2 May 2005). ASIC's consultation paper follows class order CO 05/611, which was issued on 22 June 2005 and provides relief for online superannuation calculators. This consultation paper considers possible relief for other online calculators and, in particular, considers:
- whether to exempt generic calculators from needing to be licensed
- whether to provide relief to calculator providers from statement of advice requirements
- whether the licensing provisions apply to calculator products which assess possible risks.
Comments on the paper are due by 23 September 2005. ASIC has said it plans to issue its final relief and guidance by the end of November 2005.
For further details and to obtain a copy of the consultation paper, refer to ASIC's website. (For further information about the Government's proposed financial services refinement, refer to our Breaking News for 2 May 2005. For details about the class order relief for superannuation calculators, refer to our Breaking News for 22 June 2005.)
ASIC provides guidance on giving general financial product advice
5 August 2005
ASIC has today issued guidance to help advisers comply with some of the financial product advice provisions of the Corporations Act 2001.
The guidance is provided in answers to two frequently asked questions (FAQs):
- Do I need to follow the exact wording in the Corporations Act when I give a general advice warning? [QFS 157]
- Can I give a client general advice about a financial product if I have information about their personal circumstances? [QFS 158]
The guidance has been provided as part of two of ASIC's projects implementing the Government's proposals paper Refinements to Financial Services Regulation (issued on 2 May 2005).
For further details and to access copies of the FAQs, refer to ASIC's website. (For details on the Government's proposals paper and ASIC's financial services regulation refinement projects, refer to our Breaking News for 2 May 2005 and 12 May 2005.)
ASIC releases consultation paper on authorisation requirements for general
insurance arrangers
4 August 2005
ASIC has today released a consultation paper inviting comment on proposed relief from the authorisation requirements for some distributors of general insurance products.
ASIC's proposed relief would allow distributors to provide specified dealing services in relation to general insurance products without the need to be licensed or appointed as an authorised representative of an Australian Financial Services licensee. In general terms, the proposed relief would apply where:
- the distributor arranges for the issue of specified general insurance products of an Australian general insurer; and
- the insurer accepts responsibility for the conduct of the distributor.
The consultation paper has been issued as part of one of ASIC's projects implementing the Government's proposals paper Refinements to Financial Services Regulation (issued on 2 May 2005). ASIC invites comments on the consultation paper by 2 September 2005 and plans to issue its final policy by the end of October 2005.
For further details and to obtain a copy of the consultation paper, refer to ASIC's website. (For details on the Government's proposals paper and ASIC's financial services regulation refinement projects, refer to our Breaking News for 2 May 2005 and 12 May 2005.)
ASIC issues update report on relief applications from financial services
providers
26 July 2005
ASIC has today released a report outlining 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 1 January and 30 April 2005, 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. (For details of previous update reports issued by ASIC, refer to our Breaking News for 21 December 2004 and 11 May 2005.)
Dollar disclosure and fee disclosure: what's the difference?
22 July 2005
Many financial product providers are understandably still unclear about the Federal Government's changes to the disclosure laws. The recent announcement of an extension to the transitional relief from the dollar disclosure requirements for some product issuers has highlighted the fact that there is confusion about which disclosure requirements took effect from 1 July this year, and which come into force in 2006.
For further information, please see our Client update: Financial services reform article.
ASIC allows more time for first financial reports under new accounting
standards
8 July 2005
ASIC today issued the following class orders aimed at assisting unlisted entities to complete their first financial reports under the new accounting standards by giving them an additional month to distribute financial reports to members and to lodge financial reports with ASIC.
Class Order [CO 05/0637] Additional month for first financial reports under AIFRS, applies for half-years and financial years commencing from 1 January 2005 to 31 December 2005 inclusive and applies to:
- unlisted entities that distribute financial reports to members and lodge them with ASIC under Chapter 2M of the Corporations Act; and
- unlisted Australian financial services licensees (including individuals) that lodge financial reports that comply with Australian equivalents to International Financial Reporting Standards under Chapter 7 of the Corporations Act.
Class order [CO 05/0638] Anomalies preventing certain large proprietary companies from being grandfathered, which replaces class order [CO 98/0099], ensures that 'grandfathered' large proprietary companies (ie, those companies that are not required to lodge financial reports with ASIC provided their financial reports are audited before the deadline for reporting to members) will not lose the benefit of grandfathering if they take advantage of the additional month to report.
For further details and to obtain a copy of the class orders, refer to ASIC's website.
ASIC further extends interim relief for actuaries
30 June 2005
ASIC has today extended its interim relief for eligible actuaries from the requirement to hold an Australian financial services licence from 30 June to 31 December 2005 in relation to specified classes of professional activities. The extension of the relief, which is provided under ASIC class order CO 05/680 Transitional relief for actuaries, has been granted pending Government consideration of whether it is appropriate to provide relief for actuaries from the FSR licensing requirements.
For further information (including to obtain copies of the class orders), refer to ASIC's website ASIC's website.
(Refer also to our Breaking News for 23 December 2003 in relation to the original class order relief.)
ASIC provides further relief to warrant issuers from dollar disclosure
30 June 2005
ASIC has today issued class order relief from the dollar disclosure requirements to issuers of warrants that are securities, pursuant to class order CO 05/682 Dollar disclosure: Relief for warrant issuers. The class order is intended to complement earlier relief granted by ASIC in December 2004 under class order CO 04/1431 Dollar disclosure: Costs of derivatives, foreign exchange contracts, general insurance products and life risk insurance products, to ensure that warrants that are securities are treated in the same way as warrants that are derivatives, so far as the dollar disclosure obligations under the Corporations Act apply to those financial products.
For details on the application of the class order relief and to obtain a copy of the class order, refer to ASIC's website.
ASIC announces transitional dollar disclosure relief for deposit product
(and related non-cash payment facility) issuers and general insurers
24 June 2005
ASIC has today issued class order CO 05/683 Dollar disclosure: further transitional relief, which provides for the extension of the transitional relief from the dollar disclosure requirements for issuers of deposit products and general insurers from 1 July 2005 to 1 July 2006.
ASIC has also issued class order CO 05/681 Transitional relief for deposit product providers - PDSs and periodic statements, which provides transitional relief until 1 July 2006 from disclosure requirements in Part 7.9 of the Corporations Act 2001 affecting deposit products in relation to interest rates in product disclosure statements and termination values in periodic statements.
This announced relief follows on from the Government's review of requirements for basic deposit products and general insurance products as part of the Government's Refinements to Financial Services Regulation proposals paper released in May 2005. ASIC has provided transitional relief to allow for the changes that may arise from the Government's proposed Refinements Package and the finalisation of ASIC policy in the area.
For further details (including to find out more about the application of the class order relief and to access copies of the class orders), refer to ASIC's announcement. For further background information on the Government's proposed refinements to financial services regulation, refer to our Breaking News for 2 May 2005. For background information on the dollar disclosure regime, refer to our Breaking News for 15 December 2004.
ASIC releases guidance on giving superannuation switching
advice
24 June 2005
ASIC has today released a guide for advisers (which was developed in consultation with the Financial Planning Association and the Investment & Financial Services Association) to help them comply with the Corporations Act when they give personal advice about switching superannuation funds. The guide, which is intended to give advisers practical help in relation to the choice of superannuation fund regime which commences on 1 July 2005, explains what investigations, disclosures and comparisons need to be made in relation to a client's existing superannuation fund and any new fund that might be recommended.
For further information (including to obtain a copy of the guide), refer to ASIC's website.
ASIC extends interim relief for managed investment scheme
constitutions
23 June 2005
ASIC has today announced a further extension of the interim relief for registered managed investment scheme constitutions which give the responsible entity of the scheme discretion to determine some elements of the application and redemption prices of interests in the scheme. The relief was to expire on 30 June 2005 but will now continue to operate until 31 December 2005 under variation instrument 05/691. ASIC has also announced that it will continue to take a 'no-action' position until 31 December 2005 regarding any constitutions which, as a result of containing such discretions, do not comply with ASIC's interpretation of the requirements of section 601GA of the Corporations Act 2001 and do not currently have the benefit of any specific relief.
ASIC says it expects to finalise its policy on this issue shortly and that the new policy will be released by the end of this year.
For further information on this latest announcement (and to access the variation instrument), refer to ASIC's website. (For more information on the background to this issue and details of earlier ASIC relief, refer to our Breaking News for 24 March 2005.).
ASIC provides class order relief and guidance for providers of
superannuation calculators
22 June 2005
ASIC has today announced:
- class order relief - [CO 05/611] Relief for providers of superannuation calculators; and
- guidance in relation to the conditions associated with the relief
for providers of superannuation calculators, so that those providers who meet the conditions of the class order do not require an Australian financial services licence with an advice authorisation or, if already licensed, do not need to meet the advice conduct and disclosure requirements in Part 7.7 of the Corporations Act 2001.
This announcement marks the first part of relief and guidance provided by ASIC in relation to calculators under the Federal Government's proposed Refinements to Financial Services Regulation.
For further details about the conditions of the class order relief, previous announcements by ASIC on this issue and to obtain a copy of the class order, refer to ASIC's website. Also, for further details about the Government's proposed Refinements to Financial Services Regulation and ASIC's role in this project, refer to our Breaking News for 2 May 2005 and 12 May 2005.
Common fund regulations receive assent
17 June 2005
The Governor-General has given assent to the Corporations Amendment Regulations 2005 (No 3). These regulations, which were released in draft on 19 May 2005, are designed principally to streamline legislative requirements (in line with the requirements introduced under the Corporations Amendment Regulations 2005 (No 1), which contain the enhanced fee disclosure measures) by providing temporary relief from the requirement to disclose 'common fund' expenses in product disclosure statements for non superannuation products until 1 July 2006. The relief also applies to periodic statements in some circumstances.
(For further details on the enhanced fee disclosure regulations, refer to our Breaking News for 10 March 2005.)
ASIC seeks industry comment on proposed licensing exemption for credit
rating agencies
9 June 2005
ASIC has released today a consultation paper, Licensing: Credit rating agencies, seeking comments on a proposal that credit rating agencies be exempt from holding an Australian financial services licence under the Corporations Act 2001. Interim class order relief is currently available to relevant Australian credit rating services until 31 December 2005 to exempt them from the FSR licensing requirements for their credit rating services. Comments on the consultation paper are due by 22 July 2005.
For further information (including to obtain a copy of the relevant class orders and consultation paper), refer to ASIC's website.
ASIC further extends interim relief for superannuation investment strategy
product disclosure
9 June 2005
ASIC has today issued further class order relief (CO 05/346), which extends until 30 June 2006 the interim relief currently available to superannuation trustees to delay the commencement of the product disclosure requirements under section 1012IA of the Corporations Act.
ASIC has extended the interim relief period to enable it to finalise its policy on this issue, which was originally set out in a policy proposal paper (Superannuation: Delivery of product disclosure and investment choice) and released to the public for comment in November 2004. ASIC has said that it expects to release its final policy on this issue by August 2005, which will then give the superannuation industry sufficient time to transition to compliance with section 1012IA and ASIC's final policy, as applicable.
For further information (including to obtain copies of the class orders and policy proposal paper), refer to ASIC's website.
(For further background information on this issue, refer to our Breaking News for 11 November 2004.)
ASIC announces proposed facilitation of removal of termination date from
trust deeds
6 June 2005
ASIC has announced today that it proposes to issue class order relief to allow perpetuity clauses in constitutions of affected trusts and managed investment schemes to be amended without requiring a special resolution of members. The need for relief has arisen as a result of Australia adopting International Accounting Standards (which apply for reporting periods commencing or on after 1 January 2005); concerns have been raised that the 'perpetuity clause' in some trust deeds and other constitutions of listed property trusts and some other registered schemes means that members' funds should be treated as a liability rather than equity in financial statements prepared under new accounting standards. The class order relief will allow trustees and responsible entities of affected trusts and schemes in applicable circumstances to amend constitutions to remove any 'perpetuity clause' without going to the expense of holding a meeting to obtain member approval.
ASIC expects the class order to be issued by Wednesday, 15 June 2005. For further details about how the class order relief will apply, refer to ASIC's website.
ASIC issues compliance guidance on the FSR refinements proposals and fees
template
3 June 2005
ASIC has today issued guidance to financial services providers about its compliance response to:
- the Federal Government's Refinements to Financial Services Regulation proposals paper; and
- the enhanced fee disclosure regulations (the Corporations Amendment Regulations 2005) that were made on 10 March 2005.
This guidance is intended to provide certainty to financial service providers about ASIC's administrative approach to these issues.
For further details, refer to ASIC's website. (For information about the enhanced fee disclosure regulations and the Government's proposed refinements to FSR, refer to our Breaking News for 10 March 2005 and 2 May 2005.)
ASIC extends interim relief for some non-cash payment facilities
1 June 2005
ASIC has today issued class order 05/579 which extends the interim relief for providers of low-value non-cash payment facilitates and loyalty schemes from 30 June 2005 to 28 February 2006. Appropriate regulation of these products is currently also being reviewed as part of the Government's 'Refinements to Financial Services Regulation: Proposals Paper' (refer to our Breaking News for 2 May 2005 for further details). ASIC plans to publish its final policy on these products by September 2005 (which will deal with its general approach to the regulation of non-cash payment facilities and relief for any products not appropriately regulated as non-cash payment facilities, and will also deal with any further transitional issues). In the meantime, ASIC will continue to assess new applications for interim relief.
For further details of the extended class order relief and to obtain a copy of the class order, refer to ASIC's website. (For further details on ASIC's earlier interim relief and policy proposal paper on these financial products, refer to our Breaking News for 22 December 2004 and 24 February 2004.)
Government releases proposed transitional 'common fund' regulations
19 May 2005
Following on from the making of the Corporations Amendment Regulations 2005 (No 1) (the fee disclosure regulations) on 10 March 2005, the Government has today released proposed complementary regulations that are intended to align the timeframe for 'common fund' disclosure with the new measures introduced under the fee disclosure regulations.
The closing date for submissions on the draft regulations is 1 June 2005. For further details and to obtain a copy of the draft regulations, refer to the Treasury website. For further details on the fee disclosure regulations, refer to our Breaking News for 10 March 2005.
ASIC amends policy statement and relief instruments on wholesale foreign
financial services providers
17 May 2005
ASIC has today released a revised version of policy statement 176, Licensing: Discretionary powers - wholesale foreign financial services providers, and has updated related class orders to take account of changes to FSR legislation since the policy and class orders were released. For further details (including a summary of the amendments to the policy statement) and to obtain copies of the updated documents, refer to ASIC's website.
ASIC releases updated FSR policy statements and licensing guidance papers
13 May 2005
ASIC has today released updated versions of the following policy statements and guidance papers to take account of FSR legislative and policy changes that have occurred since the policies and guidance papers were released or last updated:
- [PS 166] Licensing: Financial requirements
- [PS 167] Licensing: Discretionary powers
- [PS 168] Disclosure: Product disclosure statements (and other disclosure obligations)
- [PS 169] Disclosure: Discretionary powers
- [PS 175] Licensing: Financial product advisers – Conduct and disclosure
- The Hawking Prohibitions (Hawking Guide)
- Licensing: The Scope of the Licensing Regime: Financial Product Advice and Dealing (Advice and Deal Guide).
ASIC is also currently reviewing [PS 164] Organisational capacities and [PS 165] Licensing: Internal and external dispute resolution.
For further details (including a summary of the amendments to each of the documents) and to obtain copies of the updated documents, refer to ASIC's website.
ASIC provides details on financial services refinement projects
12 May 2005
ASIC has today released details on the eight projects it is undertaking as part of the Federal Government's Refinements to Financial Services Regulation paper issued on 2 May 2005. ASIC plans to have all projects completed by November 2005.
For details of the planned outcomes and timetables for each project, refer to ASIC's website. (For further details on the Government's proposed refinements and ASIC's eight projects, refer also to our Breaking News for 2 May 2005.)
ASIC issues update report on relief applications from financial services
providers
11 May 2005
ASIC has today released a report outlining 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 15 August 2004 and 31 December 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 previously released a similar report for the period 11 October 2003 to 14 August 2004 on 21 December 2004. For details of that report, refer to our Breaking News for 21 December 2004.)
ASIC expands class order relief for responsible entities of managed
investment schemes
11 May 2005
ASIC has today released class order [CO 05/26] Constitutional provisions about the consideration to acquire interests, which expands the class order relief available to responsible entities of managed investment schemes. CO 05/26 replaces class order [CO 98/52] Relief from the consideration to acquire constitutional requirement.
The new class order carries over the previous relief that ASIC provided under CO 98/52, with some additional refinements. CO 05/26 covers some circumstances for which ASIC previously granted relief on a case-by-case basis and now considers ought to apply to all responsible entities (other than timeshare responsible entities).
For further details (including a summary of the differences between the old and new class order relief) and to obtain a copy of CO 05/26, refer to ASIC's website.
ASIC grants relief for tailored financial services guides
3 May 2005
ASIC has today issued a new class order, [CO 05/27] Financial Services Guides - Tailoring relief, which promotes tailoring of financial services guides by relieving financial services providers from the need to comply with the additional remuneration disclosure requirements currently prescribed by the Corporations Regulations 2001 where the information:
- does not relate to a financial service that will be or is likely to be provided to the client; or
- relates exclusively to services which do not require the provision of a FSG.
For further information about the application of the class order and to obtain a copy of the class order, refer to ASIC's website.
ASIC welcomes the Government's financial services refinements proposals
paper
2 May 2005
Following on from the Government's announcement earlier today about its financial services refinements proposals paper, ASIC has announced that it will take the lead on eight projects arising out of the 25 refinement proposals in the paper.
ASIC's projects involve:
- issuing further guidance on Statements of Advice (SOAs), including releasing a model SOA;
- issuing guidance and, if appropriate, relief in relation to compliance with the general advice warning requirements where there is an ongoing relationship between the adviser and the retail client;
- issuing guidance and, if appropriate, relief to deal with inconsistencies in relation to the general advice warning requirements applying to product issuers in their advertisements;
- issuing guidance and, if appropriate, relief to clarify that advisers do not necessarily provide personal advice merely because they have some personal information about a retail client;
- issuing further guidance and, if appropriate, relief to promote the provision of basic online calculators;
- issuing guidance and, if appropriate, relief on the authorisation requirements for product arranging agents of Australian general insurance issuers;
- undertaking a discrete review of ASIC Policy Statement 146 Licensing: Training of financial product advisers on adviser minimum qualifications as it applies to advice about basic deposit products and related non-cash payment facilities; and
- issuing guidance and, if appropriate, relief to deal with the unintended application of the non-cash payment facility definition to some facilities.
ASIC has said it will provide a more detailed delivery timetable and scope of its projects in the next two weeks. Its intention is to have most of them finished or, where public consultation is needed, consultation completed by the end of September.
Government releases FSR refinements proposals paper
2 May 2005
The Government has today released a proposals paper, Refinements to Financial Services Regulation, which contains 25 proposed refinements to improve the operation of the financial services regulation framework. The proposals contained in the paper respond to concerns raised by the community with the Government relating to aspects of the practical operation of the changes brought about by the Financial Services Reform Act 2001. The paper outlines a series of proposals aimed at addressing these concerns.
The Government plans to meet with industry and consumer representatives to discuss its proposed changes. Written comments on the paper are welcomed, including from the public, and are due by 3 June 2005.
For further details about the consultation process and to obtain a copy of the proposals paper, refer to the Treasury website.
ASIC further extends interim relief for MIS constitutions
24 March 2005
ASIC today announced that it has extended until 30 June 2005 interim relief permitting fund managers in some circumstances to provide 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. (The current interim relief period expires on 31 March 2005.)
For further details relating to this latest extension of the interim relief and a copy of the relief instrument, refer to ASIC's website. (For details on the background to this issue, refer to our Breaking News for 22 December 2004.)
Fee disclosure regulations receive assent
10 March 2005
The Governor-General has given assent to the Corporations Amendment Regulations 2005 (No 1). These regulations, which were released in draft on 23 December 2004, are designed principally to give effect to the enhanced fee disclosure measures announced by the Government in June 2004. For further details on the Government's earlier announcement on enhanced fee disclosure, refer to our Breaking News for 16 June 2004.
(You may also be interested in our report summarising the main requirements of fee disclosure.)
ASIC Training Register to include specialist courses in self-managed
superannuation fund advice
2 March 2005
ASIC today announced that the ASIC Training Register has now been extended to include specialist courses in self-managed superannuation fund advice as a sub-category of superannuation.
ASIC and APRA facilitate 'intra-fund' superannuation member benefit
transfers
2 March 2005
ASIC today issued a new class order, CO 04/1574 Application form and cooling-off relief for certain transfers of members between financial products and interests within a superannuation fund, to provide conditional relief from application form requirements and cooling-off rights for trustees of some regulated superannuation funds in the circumstances of an 'intra-fund' transfer. The relief, which was developed in conjunction with the Australian Prudential Regulation Authority, will permit members of funds to be transferred between products within a fund in applicable circumstances without the members' consent. The class order applies to approved trustees under Part 2 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) or any trustee holding a registrable superannuation entity licence under Part 2A of the SIS Act.
For further details (including to obtain a copy of the class order), refer to ASIC's website.
ASIC seeks comment on policy for better experts' reports
24 February 2005
ASIC has today released a new policy proposal paper (PPP), Better experts' reports: ASIC policy proposal, in which it is seeking industry comment on how to promote better experts' reports. The purpose of the PPP is to:
- address a perception that experts' reports might not be sufficiently independent;
- promote higher quality reports that are clear, concise and effective; and
- update ASIC's current policies for legislative developments.
Ultimately, ASIC proposes to replace its four existing policies on experts with two new policies, one on independence and the other on quality and content of experts' reports.
Comments on the PPP are due by Wednesday, 27 April 2005.
For further details (including to obtain a copy of the PPP), refer to ASIC's website.
ASIC releases policy on approving codes of conduct
23 February 2005
ASIC has today issued a new policy statement that sets out how it will approve codes of conduct for the financial services sector in accordance with the Corporations Act 2001. Policy Statement PS 183, Approval of financial services sector codes of conduct, describes the key features of an effective codes regime that can apply to large and small sections of the financial services industry and also sets out the process by which ASIC will exercise its approvals power.
ASIC seeks comment on draft updated practice note 55 - consent to quote in
disclosure documents
27 January 2005
ASIC has today issued an updated draft of practice note 55 Disclosure documents and PDS: consent to quote (PN 55) and is inviting public comment on its proposed changes by 11 March 2005.
For further details about the changes proposed by ASIC, refer to ASIC's website (including the information release issued by ASIC which contains an attachment providing a more detailed summary of some of the changes to PN 55 and includes particular questions on which ASIC is seeking comment).
ASIC amends licence conditions
14 January 2005
ASIC has today issued an updated edition of Pro Forma 209 Australian financial services licence conditions, following amendments to the Acts Interpretation Act 1901.
The changes came into effect on 1 January 2005 and apply to any AFS licence or licence variation issued by ASIC from 1 January 2005.
ASIC issues licensing relief for some overseas dealers or market makers in
derivatives and foreign exchange contracts
13 January 2005
ASIC has today issued class order [CO 04/1570] Licensing relief for some overseas dealers or market makers in derivatives and foreign exchange contracts, which provides relief to some overseas wholesale financial service providers that are dealing in foreign exchange contracts and making markets in derivatives and foreign exchange contracts in Australia from the need to hold an Australian financial service licence. The relief applies to foreign companies that meet the equivalent requirements in regulation 7.6.01(1)(ma) of the Corporations Regulations 2001
ASIC issues licensing relief for securitisation special purpose vehicles
11 January 2005
ASIC has today issued class order [CO 04/1526]: Securitisation special purpose vehicles and amended ASIC Policy Statement 167 Licensing: Discretionary powers and transition to give a conditional exemption for securitisation special purpose companies and trustees from the requirement to obtain an Australian financial services (AFS) licence. To ensure there is adequate time for industry to comply with the AFS licensing requirements of the Corporations Act or ASIC's exemption under the new class order, ASIC has provided a further transitional period (under earlier class order CO 03/1098) until 30 June 2005. The new class order takes effect from 1 July 2005.
For further details of the relief and to obtain copies of the class orders and policy statement, refer to ASIC's websiteete. For background information on this issue, refer to our Breaking News of 17 August 2004.
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