Australia Preparing For Fund Reporting Changes

by Mary Swire, Tax-News.com, Hong Kong

10 June 2011

Assistant Treasurer Bill Shorten has announced changes that will facilitate financial services providers in transitioning to the new Product Disclosure Statement regime from June 2012. The regime affects providers of superannuation funds and simple managed investment schemes.

From June 22, 2012, Product Disclosure Statements for all superannuation products and simple managed investment schemes regulated by the Corporations Act 2001 must be eight pages in length, and meet new content requirements that have been redesigned following consumer testing. Until then transitional arrangements will be in place.

"The simplified PDS changes complement the government's Future of Financial Advice reforms, which will improve the quality of financial advice provided to Australian investors," Shorten said.

Shorten explained that the introduction of shorter Product Disclosure Statements is a key deregulation and consumer protection achievement of the government. It cuts down product disclosure documents from over one hundred pages to eight pages, reducing costs for business and providing consumers with high impact disclosure to enable them to make better choices about their money, he said.

To aid the transition to the new regime, new changes will allow providers of these regulated products to:

• Remain in the old regime until June 22, 2012;
• Continue to issue supplementary PDSs until June 22, 2012; and,
• Opt into the new regime from June 22, 2011, if they are ready to.

Consistent with the government's existing policy in relation to shorter disclosure, a number of other changes are also being made, to clarify or refine the operation of the requirements. These refinements include:

• Changes to confirm that pure risk products are excluded from the regime (irrespective of whether they are provided through a superannuation fund or not);
• Changes to clarify that combined defined benefit and accumulation products are included in the regime; and
• Amendments to the regulations to allow for situations where applications are electronically lodged.

Draft regulations for these amendments will be available shortly for public comment. The refinements, the government said, will start as soon as possible, and where necessary, providers can approach Australian Securities and Investment Commission for appropriate interim relief.

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