January 1, 2001 has been slated as implementation date for CLERP 6 changes.
January 1, 2001 has been slated as implementation date for CLERP 6 changes.
Addressing the Committee for Economic Development of Australia (CEDA) on Friday, financial services minister Joe Hockey said he was committed to “a speedy passage” of the reforms. The legislation implementing the reforms will be called Financial Services Reform Bill (FSR).
“I want to introduce the FSR Bill to Parliament in June, pass it through the Senate as soon as possible and have it in place, with appropriate transitional measures, to begin 1 January, 2001,” he said.
The Bill’s disclosure requirements will mean that all financial services providers will have to provide clients with what will be called a Financial Services Guide, which outlines fees and commissions.
Financial advisers will be required to provide clients with a written Statement of Advice which will outline details of any benefits received by the adviser.
“This approach recognises that where a commission includes payment for back of-fice services, that portion of commission does not need to be disclosed. At the same time, there will be prohibitions on false and misleading conduct, which will prevent this part of the commission being loaded up in order to avoid disclosure,” Hockey said.
The Bill also introduces a Product Disclosure Statement for any advice on a spe-cific product. However, “details of commissions will only need to be disclosed in the Product Disclosure Statement, where the commission will ultimately reduce the return to the client”.
The Government has discarded an “opting up” proposal outlined in its consultation paper (“opting up” is the process by which a retail investor can choose to forgo protection by opting to be treated as a wholesale client) because of widespread in-dustry concern.
Comments on the draft Bill will be accepted until 12 May.
