The Federalopposition has made a last minute bid to block parts of the Financial Services Reform Act (FSRA) in an attempt to modify crucial new disclosure requirements for superannuation products.
The Labor party issued a notice in the Senate last week to disallow some of the regulations relating to the FSRA after arguing the provisions, which spell out the disclosure regime for superannuation products, were inadequate.
The Labor party’s notice will mean that, unless the Government allows a debate on the regulations within 15 sitting days of parliament, the regulations will be automatically excluded from the FSRA.
The Labor party’s position was applauded last week by the Association of Superannuation Funds of Australia (ASFA).
ASFA director of policy and research Michael Anderson says there were crucial flaws in the disclosure regime for superannuation products under the FSRA, including the provisions which prescribe a standard method for superannuation providers to disclose fees and charges.
But Labor’s stance has earned the ire of the Government and other sections of the financial services industry.
The Parliamentary Secretary to the Treasurer, Senator Ian Campbell, described the Labor move as highly irresponsible, arguing the Government had conducted an extensive consultation campaign with the industry before finalising the provisions.
The chief executive of the Investment and Financial Services Association, Richard Gilbert, says Labor’s move would create a “regulatory vacuum” for superannuation product providers, many of whom have been developing new product disclosure documents under the proposed regulations.
At least one major superannuation product provider, Colonial First State Investments, has also already issued a product disclosure statement based on the new regulations.
The Labor party has also issued a notice in the Senate to restrict the hours in which financial services providers can ‘cold-call’ potential clients under the FSRA.
Labor Shadow Minister for Retirement Incomes and Savings Nick Sherry says the current FSRA regulations, which permit product providers to make unsolicited calls between the hours of 8:00am to 9:00pm on any day except Christmas day, Good Friday and Easter Sunday, are too broad.
Sherry says the Labor party is prepared to negotiate with the Government on amendments to the FSRA regulations.
