ASIC Defers New Fee Disclosure Obligations Two Years to 2022

Superannuation funds and managed investment scheme issuers will now have until September 2022 to comply with fee and cost disclosure requirements.

ASIC (Australian Securities and Investments Commission) has given superannuation funds and managed investment schemes an additional two years to comply with new product disclosure obligations.

Product issuers were initially required to comply with an updated regulatory guide on fee and cost disclosure in all product disclosure statements (PDSs) from 30 September 2020. This has been extended to 30 September 2022, to give super funds and product issuers more time and flexibility in light of Covid-19.

However, trustees can choose to opt-in to the new regime from 30 September 2020 for PDSs and 1 July 2020 for periodic and exit statements, ASIC said.

The regulator also said issuers must comply with the new requirements in their periodic and exit statements for reporting periods commencing on 1 July 2021.

The new regulatory guide is aimed at ensuring greater transparency and achieving better consumer outcomes by setting standards for the clear presentation of fees and costs information in product disclosures.

The disclosure enhancements were announced in November amid findings of “widespread non-compliance with fee disclosure obligations” across a sample of AFS licensees and their representatives.

“While disclosure on its own is not sufficient to ensure consumers achieve the right outcomes, consistent and comparable disclosure helps consumers and their financial advisers to better understand the fees and costs involved in financial products, compare products more easily, and make more informed assessments about whether a product is suitable for the consumer,” ASIC says.

Amendments to RG 97 have also been made to improve the presentation of fees and costs information for consumers, and tweak the data inputs needed to comply with the new regime, among other changes, detailed here.