ASIC modifies super fund investments disclosure requirements
The corporate regulator has modified the policy statement it issued covering the appropriate disclosure requirements outlined in section 1012IA of the Corporations Act addressing the investment strategies of superannuation funds.
Policy Statement 184, originally issued by the Australian Securities and Investments Commission (ASIC) in August 2006, has now been amended in response to industry concerns over the practicality of the original compliance procedures outlined.
The main amendment made to the policy statement now gives superannuation trustees the ability to include investment strategy information linked with a particular financial services product in the Product Disclosure Statement (PDS) of the superannuation fund.
The change means superannuation trustees now have three disclosure options regarding the use of financial products in their investment strategies.
Trustees can still opt to prepare a PDS regarding the financial products they will use while investing members’ funds, or provide members with the PDS prepared by the issuer of the investment product that will be employed.
ASIC has also relaxed the need for super fund trustees to disclose a comparison outlining the differences between investing in the particular financial products via the super fund and buying units in the product as a direct retail investor. The regulator has now left the necessity to disclose this type of information up to the discretion of the fund trustees.
The final change made deals with additional allocations made to the various financial products being used by the super fund to carry out its investment strategies. These now have to be disclosed if the additional allocation is considered “materially adverse” rather than “defective”, as the original standard required.
The time period for proper compliance with the Corporations Act has also been changed, with the new rules coming into effect from July 1, 2007. This means all trustees will have to comply with the new regime in the next PDS they issue after this date or before July 1, 2008, whichever occurs first.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
