ASIC tweaks binding industry fee model

By Craig Phillips

The Australian Securities andInvestments Commission (ASIC) has released a revised version of its good practice model for fee disclosure in product disclosure statements (PDS) that will be mandated as part of the Government’s broad fee reform announcement last week.

ASIC released the initial version of the good practice model in August 2003, however, the amended version has been rolled out reflecting developments made since identifying some industry short comings in the first report.

The amendments include the disclosure of fees gross of tax and the separate disclosure of administration and investment management costs.

“The new model improves access by investors to clear, concise and comprehensive information about the fees and costs they will incur for an investment product,” ASIC financial services regulation executive director Ian Johnston says.

Johnston adds that the improvements were made following consumer testing of the initial version of the model, and a further consultation process with the industry.

Parliamentary Secretary to the Treasurer Ross Cameron announced the new model will now be mandated, along with extending this to include ASIC’s fee template relating to periodic statements to investors.

The peak regulator is intending to consumer test the model over the coming months.

“ASIC looks forward to the industry applying the improved good practice model in any new product disclosure statements prepared after the release of the improved version, and transitioning to the improved model by December 2005 for all product disclosure statements,” Johnston says.