The Australian Securities and Investments Commission (ASIC) has granted relief to promote the provision of tailored Financial Services Guides (FSGs). This is set out in ASIC Class Order [CO 05/27] Financial Services Guides – Tailoring Relief.

This new class order promotes tailoring of FSGs by relieving financial services providers from the need to comply in all situations with the additional remuneration disclosure requirements currently prescribed by the Corporations Regulations 2001 (the regulations).

‘ASIC considers that the law intended that FSGs only contain remuneration information about the likely services to be provided to consumers’, ASIC’s Director of Regulatory Policy, Mr Mark Adams said.

‘By permitting tailoring of remuneration information, ASIC’s relief will encourage relevant and targeted disclosure to consumers and therefore improve the effectiveness of FSGs. It is also designed to promote the capacity for those who provide a wide range of financial services to create a number of FSGs, each of which can be tailored to the needs of particular groups’, Mr Adams added.

Details of the relief

The Corporations Act 2001 generally permits FSGs to include information limited to the reasonable information needs of the retail client to whom the FSG is actually provided. However, regulations 7.7.04(2) and 7.7.07(2) require FSGs to include specific additional information about remuneration, commissions and other benefits. This additional information must be included in all FSGs, even where:

• the information is not relevant to the financial services that will be or are likely to be provided to the client receiving the FSG; or
• the remuneration, commission or other benefits relate solely to services for which an FSG would not be required.

Class Order [CO 05/27] exempts financial service providers from including any additional remuneration information required by regulations 7.7.04(2) and 7.7.07(2) in a FSG, where:

• the information does not relate to a financial service that will be or is likely to be provided to the client; or
• the information relates exclusively to services which do not require the provision of a FSG (e.g. if the service is provided only to wholesale clients).

However, if the providing entity later provides another financial service to a retail client and the additional remuneration disclosures have not previously been made to the client in an FSG because of the relief in Class Order [CO 05/27], the providing entity will be required to give the client a new FSG or supplementary FSG including the relevant additional remuneration disclosures for that financial service.

It should be noted that the Government's Proposals Paper Refinements to Financial Services Regulation issued on 2 May 2005, contains various additional proposals designed to further promote the ability of licensees to tailor disclosure documents to different types of clients or products (e.g. refer to Refinement Proposal 1.1).

End of release

Download a copy of:

• Class Order [CO 05/27] Financial services guides – tailoring relief
• From the Treasury's website, the Proposals Paper Refinements to Financial Services Regulation