ASIC today released updated versions of the following regulatory guides:
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Regulatory Guide 36 Licensing: Financial product advice and dealing (RG 36)
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Regulatory Guide 121 Doing financial services business in Australia (RG 121)
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Regulatory Guide 170 Prospective financial information (RG 170)
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Regulatory Guide 175 Licensing: Financial product advisers - conduct and disclosure (RG 175)
The new versions of the guides remove outdated information and incorporate references to regulations released in recent months, including those affecting issuers of standard margin lending facilities, simple managed investment schemes and certain superannuation products.
The amendments do not represent substantive policy changes. Further details are provided in the background to this advisory.
Background
The guides have been amended to incorporate minor technical updates and remove outdated references since the regulatory guides were last published.
A summary of the regulatory guides and amendments are as follows:
Regulatory Guide 36 Licensing: Financial product advice and dealing (RG 36) is for persons who may provide financial product advice or deal in a financial product, as defined in the Corporations Act 2001 (Corporations Act), and their professional advisers. RG 36 provides guidance on the meaning of ‘provide financial product advice’ and the meaning of ‘deal in a financial product’. It also provides guidance on the obligations that apply to providers of financial services.
Amendments have been made to the definition of ‘financial service’ to include ‘traditional trustee company services’. This change also recognises other legislation such as the National Consumer Credit Protection Act 2009 (National Credit Act).
Regulatory Guide 121 Doing financial services business in Australia (RG 121) is for people or companies from overseas who intend to conduct a financial services business in Australia. RG 121 provides general guidance on the financial services regime in Australia, such as when someone outside Australia will be required to hold an Australian financial services (AFS) licence, the circumstances in which a person or company may be exempt from holding an AFS licence, and some of the obligations associated with being a licensee.
The guide has been updated to include ‘traditional trustee company services’ under the definition of ‘financial service’, and includes references to other rules and legislation relevant to licensees that have been made since the guide was last published, such as the National Credit Act and ASIC market integrity rules.
Regulatory Guide 170 Prospective financial information (RG 170) is for issuers of financial products. RG 170 provides guidance on ASIC’s approach to the use of prospective financial information (including financial forecasts and projections) in a disclosure document or PDS.
Amendments have been made to RG 170 to note how issuers of standard margin lending facilities, simple managed investment schemes and certain superannuation products should disclose prospective financial information (where there are reasonable grounds to do so) when complying with the new shorter PDS requirements under the Corporations Amendment Regulations 2010 (No. 5) which prescribes the content and length of the Product Disclosure Statement (PDS) for these products.
The format for RG 170 has been also been updated.
Regulatory Guide 175 Licensing: Financial product advisers - conduct and disclosure (RG 175) is a guide for persons who provide financial product advice and their professional advisers. This guide considers how certain conduct and disclosure obligations in Pt 7.7 of the Corporations Act apply to the provision of financial product advice to retail clients.
RG 175 has been amended to clarify obligations relating to the provision of financial advice via an intermediary (i.e. as a secondary service) which was previously located in Information Release (IR 04-78) ASIC grants relief for secondary financial service providers. Information about dealing and providing a custodial or depository service as a secondary service that was contained in Information Release (IR 04-78), is now contained in Dealing and providing a custodial or depository service as a secondary service (Information Sheet 141).
For more information about the financial services regime, including relevant policy announcements and regulatory guidance, please see the financial services page on ASIC's website.
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