The Australian Securities and Investments Commission (ASIC) today reminded existing operators of managed discretionary account (MDA) services that they must comply with the transitional arrangements under Policy Statement 179: Policy Statement 179 Managed discretionary account services (PS 179). This includes obtaining an Australian financial services (AFS) licence authorisation to provide MDA services by 10 December 2004.

ASIC’s approach to the regulation of MDA services, including the transitional arrangements that apply, are set out in PS 179 and summarised in ASIC’s Information Release 04-01: ASIC policy approach to the regulation of managed discretionary account services (IR 04-01). ASIC has provided transitional relief to allow existing MDA operators time to comply fully with the new policy.

Under the transitional arrangements, existing MDA operators have until 10 December 2004 to obtain their AFS licence authorisation for MDA services. Existing MDA operators and new MDA operators starting MDA services before 11 December 2004 must make a self-certification of compliance and lodge a reliance notice with ASIC by the relevant date. Existing non-market participant MDA operators must lodge a reliance notice by 11 June 2004.

When and how MDA operators must comply with these and other requirements under PS 179 depends on whether they are:

• a participant of the Australian Stock Exchange or Sydney Futures Exchange (SFE) or an ex-associate participant of the SFE;
• an existing non-market participant MDA operator;
• a new MDA operator providing MDA services before 11 December 2004; or
• a new MDA operator providing MDA services on or after 11 December 2004.

Reliance notices may be lodged at the following address:

The Manager
FSR Legal and Technical Operations
Australian Securities and Investments Commission
GPO Box 9827
Sydney NSW 2001

ASIC encourages MDA operators, including operators providing services marketed as separately managed accounts, individually managed accounts, investment advisory programs, managed discretionary portfolio services and discretionary portfolio accounts, to read PS 179 and the attachments to IR 04–01 to find out what time frames apply to them.

ASIC anticipates that MDA operators will be able to apply for the AFS licence authorisation to provide MDA services when version 6 of eLicensing is released in September this year. ASIC will make a further announcement later in the year to confirm when this authorisation will be available.

Copies of PS 179 and IR 04–01 are available from the ASIC website, www.asic.gov.au, along with the information release IR 04–08: ASIC policy statement: managed discretionary account services and the class orders that accompanied the release of PS 179.

End of release

Read:

• Information release 04-01: ASIC policy approach to the regulation of managed discretionary account services
• Information release 04-08: ASIC policy statement: managed discretionary account services

Download a copy of:

Policy Statement 179: Policy Statement 179 Managed discretionary account services