Condensed PDS timeframe revealed
Providers of superannuation products and simple managed investment schemes will have just over a year to adapt to new Product Disclosure Statement (PDS) requirements, under a new proposal by the Government.
Assistant Treasurer Bill Shorten (pictured) said that from 22 June 2012 these product providers would need to cut their PDSs down to just eight pages and meet new content requirements.
The move is designed to help consumers who have in some cases been forced to trawl through over 100 pages to understand key information about financial products.
Transitional arrangements will be put in place to give product providers flexibility and ensure that all can meet the changes.
These include allowing product providers to continue to issue supplementary PDSs until 22 June 2012, as well as the option to take up the new regime from as soon as 22 June 2011.
Pure risk products will be excluded from the new regime irrespective of whether they are provided through superannuation, while combined defined benefit and accumulation products will be included.
Shorten stated that further changes to apply the shorter disclosure requirements to platforms and multi-funds are not currently in the works.
Draft regulation on these amendments will be available shortly for public comment.
Financial Services Council (FSC) director of Policy, Martin Codina, said the changes would provide the industry with a smooth transition to the new eight-page regime.
"The FSC is especially pleased Minister Shorten has clarified that the new eight page regime is not intended to apply to platforms and multi-funds," Codina said.
"The changes to exclude pure risk products from the regime are also a good outcome for consumers and the industry."
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