RG 97 consultation

ASIC released Consultation Paper 308 Review of RG 97 Disclosing fees and costs in PDSs and periodic statements and commenced on 8 January 2019.

The consultation followed the release of Report 581 Review of ASIC Regulatory Guide 97: Disclosing fees and costs in PDSs and periodic statements (REP 581).

Consultation has now closed.

Read:

ASIC undertook a consumer testing of some of the proposed changes to the fees and costs disclosure regime. See consumer testing for more information.

Background

Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (RG 97) provides guidance on the fees and costs disclosure regime for Product Disclosure Statements (PDSs) and periodic statements. The legal requirements for disclosing fees and costs in PDSs and periodic statements are set out in Schedule 10 of the Corporations Regulations 2001 (Cth) (Corporations Regulations) (as modified by Class Order [CO 14/1252]).

In July 2018, ASIC released REP 581. REP 581 was prepared by an external expert (Mr Darren McShane) and is a comprehensive analysis of the fees and costs disclosure issues arising under the Australian regulatory framework. REP 581 set out recommendations and observations in relation to the fees and costs regime for ASIC to consider. For more information about REP 581, see RG 97 review.

Consultation Paper 308 Review of RG 97 Disclosing fees and costs in PDSs and periodic statements

ASIC is committed to ensuring that consumers who actively seek information about fees and costs receive transparent and usable fees and costs information to help them to:

  • make confident and informed value-for-money decisions
  • compare products, and
  • understand the fees and costs charged to them.

At the same time, we want to make sure that the fees and costs disclosure regime is practicable for industry.

The consultation paper asked for feedback on ASIC’s proposals to make changes to the fees and costs disclosure regime. The consultation paper also sought feedback on:

  • a draft updated Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (draft updated RG 97), and
  • proposed amendments to Schedule 10 to the Corporations Regulations (draft amendments to Sch 10).

The consultation paper, draft updated RG 97 and draft amendments to Sch 10 are available on our website on the CP 308 landing page.

In preparing the consultation paper, ASIC carefully considered REP 581, and the feedback provided by industry to Mr McShane during his review.

We have attempted to structure the draft updated RG 97 so that it is logical and easy to follow, and more clearly explains the fees and costs disclosure requirements.

Timeline for consultation process and next steps

Stage   1

8 January 2019

ASIC consultation paper released, draft updated RG 97 and draft amendments to Sch 10 released.

Stage   2

2 April 2019

 

Comments due on the consultation paper, draft updated RG 97 and draft amendments to Sch 10.

Stage   3

Expected to be in the second half of 2019

Response to submissions on the consultation paper and report on consumer testing released.

Release of:

Stage   4

To be determined

Commencement of revised Class Order [CO 14/1252].

Guidance in updated RG 97 applies.

Stage   5

Second half of 2019 onwards

Consideration of any outstanding proposals identified in the consultation paper for further consideration.

Update on consultation

Consultations closed on 2 April 2019. ASIC has received 35 submissions from stakeholders including industry bodies, responsible entities, superannuation trustees and service providers.

We are carefully considering the submissions and consumer testing results to finalise our response to the proposals, RG 97 and amendments to CO 14/1252. We expect that the details of any changes to the disclosure requirements should be settled in 2019 but we are unlikely to require these to be implemented by issuers this calendar year.

ASIC has amended Class Order 14/1252 to ensure it is consistent with Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 and Regulations (PYSP), which ban exit fees from 1 July 2019 for superannuation products. This is a technical amendment only which eliminates the exit fee line from the fees and costs disclosure template.  See media release 19-149MR

A number of submissions to CP 308 raised the need to consider the PYSP law reforms. ASIC will take PYSP into account when finalising its position.

Consumer testing

ASIC undertook consumer testing of some of the proposed changes to the fees and costs disclosure regime during the consultation period so that the fees and costs disclosure requirements can be finalised as soon as possible.

For further information on consumer testing, see proposal C1 in the consultation paper.

Roundtable meetings

As part of the consultation process, ASIC held roundtable meetings at ASIC's Sydney and Melbourne offices on 4 and 5 March 2019. Approximately 120 stakeholders attended the roundtable meetings.

View a copy of the slides from ASIC's presentation at the roundtable meetings (PDF 1.05 MB)

The roundtable meetings were an opportunity to hear us describe our proposed changes to the fees and costs disclosure regime which are set out in the consultation paper and to ask us any questions you may have about our proposals.

While there was be a limited opportunity to provide feedback on our proposals at the roundtables, the primary method for responding to the consultation paper is of course to provide a written submission. Accordingly, you did not need to attend the roundtables to ensure that your response to the consultation is considered but rather it might have assisted you in formulating your submission.

Compliance obligations

ASIC has decided to extend its current compliance approach to the fees and costs disclosure requirements until the consultation process is complete and any changes to the fees and costs disclosure requirements are finalised and in force.

This means that ASIC will not look to take action against a trustee or responsible entity if they are making reasonable endeavours to comply with the fees and costs disclosure requirements in Class Order [CO 14/1252], RG 97, the Corporations Act and the Corporations Regulations, and not misleading consumers about fees and costs. 

For more information, please refer to Question 1B of ASIC's fees and costs disclosure Q&A.

ASIC has also extended the time periods for compliance with certain aspects of Class Order [CO 14/1252]. For more information, please refer to Question 1C of ASIC's fees and costs disclosure Q&A.

Questions

If you have questions regarding the consultation or the fee and costs disclosure requirements, please email ASIC at feeandcostdisclosure@asic.gov.au

What's new

Insurance in Superannuation Voluntary Code of Practice

4 October 2019

ASIC has issued a letter to superannuation industry associations, outlining our observations and concerns about the implementation of the Insurance in Super Voluntary Code of Practice.

Read the letter

ASIC remakes instrument about departed former temporary residents’ unclaimed superannuation disclosure

ASIC has remade Class Order [CO 09/437] Departed former temporary residents superannuation – Disclosure relief, which was due to expire on 1 October 2019.

Read the media release  

View the instrument

Trustees warned about influencing employers through improper inducements

ASIC has issued guidance to superannuation trustees, reminding them that using improper inducements to influence employers in their choice of default fund is illegal.

Read the media release Read INFO 241

Lifting the Bar, Superfunds June 2019

ASIC is urging superannuation trustees to prioritise member interests when handling insurance claims and complaints.

In this month’s Superfunds magazine, Senior Executive Leader for Superannuation, Jane Eccleston explains why change is necessary and how small improvements can make a big difference for super fund members.

Read the article (PDF 376KB)

Member communications associated with the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018

11 April 2019

ASIC has issued a letter to superannuation industry associations to highlight expectations relating to member communications associated with the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018, particularly in relation to initial insurance cancellation notices to be issued by 1 May 2019.

Read the letter

ASIC and APRA publish joint letter on superannuation fees

10 April 2019

ASIC and APRA have published a joint letter to all registrable superannuation entity licensees to reinforce the importance of ensuring fees charged to members are in line with the members’ best interests.

Read the release and joint letter

Roundtable meetings on fees and cost disclosure

5 March 2019

ASIC held roundtable meetings on the RG 97 fees and costs disclosure regime:

- in Sydney on Monday 4 March 2019 at ASIC’s office at 100 Market Street, and

- in Melbourne on Tuesday 5 March 2019 at ASIC’s office at 120 Collins Street.

Find out more


Last updated: 02/07/2019 11:09