The Australian Securities and Investments Commission (ASIC) has granted relief to secondary service providers from the Financial Service Guide (FSG) obligations, so that secondary service providers can give their clients access to FSG information in a practical manner.

A secondary service provider is a licensee (or authorised representative) who provides financial services to retail clients via another person (referred to as the ‘intermediary’).

‘Secondary service providers don’t have a direct relationship with the retail clients who receive their services, so they may have difficulty complying with the retail client requirements of the Corporations Act 2001 (the Act), in particular the requirement in Part 7.7 of the Act to give clients an FSG’, said ASIC’s Director of Regulatory Policy, Mr Mark Adams.

‘ASIC’s relief will help secondary service providers inform retail clients what services they provide in a practical and cost-effective manner’, he said.

ASIC has granted class order relief in four areas, namely:

1. General FSG relief: Where an arrangement exists for an intermediary to give a retail client the secondary service provider’s FSG, and other conditions are met, the secondary service provider has been granted relief from the consequences of failing to actually provide an FSG. This relief applies from 1 July 2005. See [CO 04/1571] for full details of the relief.

2. Transitional FSG relief: Until 30 June 2005, secondary service providers can meet their obligations to provide an FSG to retail clients by posting it on their website (if they have one), making it available on request and meeting some other conditions. This relief gives secondary service providers a reasonable opportunity to put in place the arrangements under our general FSG relief, which commences on 1 July 2005. See Class Order [CO 04/1571] for full details of the relief.

3. FSG relief for experts: Where an expert’s report is to be included in a third party’s disclosure document (such as a prospectus or product disclosure statement), the expert’s FSG may be included as a separate and clearly identifiable part of the expert’s report if other conditions are met. See Class Order [CO 04/1572] for full details of the relief.

4. FSG relief for arrangers: Where a person arranging for the issue of a financial product by a product provider under an intermediary authorisation (paragraph 911A(2)(b) of the Act) and other conditions are met, the arranger’s FSG can be included as a separate and clearly identifiable part of the product provider’s PDS. See Class Order [CO 04/1573] for full details of the relief.

Further guidance on secondary services provision and complying with the Act is available from www.asic.gov.au/fsrrelief and will be available in ASIC’s suite of FAQs in early 2005. It will include how to identify whether a service is a secondary service.

Copies of Class Order [CO 04/1571], [CO 04/1572] and [CO 04/1573] can be obtained from the ASIC website at www.asic.gov.au/co

End of release

Download a copy of:

• Our guidance on secondary services provision and complying with the Act
• Class Order [CO 04/1571]
• Class Order [CO 04/1572]
• Class Order [CO 04/1573]