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19-149MR ASIC amends fees and cost disclosure to align with Protecting Your Super Package laws
ASIC has amended Class Order 14/1252 [CO 14/1252] to ensure it is consistent with the Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 and Regulations (PYSP), which ban exit fees from 1 July 2019.
CO 14/1252 modifies the Corporations Act 2001 and Corporations Regulations 2001 to set out requirements for the disclosure of fees and costs in Product Disclosure Statements (PDSs) for superannuation and managed investment products.
The amendment made is technical only and applies to disclosure concerning superannuation products. It reflects the PYSP ban on exit fees for these products by eliminating the line allowing for disclosure of exit fees. The amendment does not otherwise make any change to the requirements set out in CO 14/1252.
ASIC is reminding product issuers that as part of their implementation of PYSP, they need to take care that, from 1 July 2019, PDSs do not suggest that exit fees will be charged on superannuation products. They should also implement any changes necessary to ensure that no exit fees are charged in practice. We understand that some issuers may have difficulty implementing changes to delete the line about exit fees from their template by 1 July (although it will be blank) and encourage them to make this change as soon as possible.
ASIC’s broader review of the fees and costs disclosure regime for superannuation and managed investment schemes (see CP 308 RG97: Disclosing fees and costs in PDSs and periodic statements) is continuing and will not affect the requirement to comply with the PYSP amendments and CO 14/1252.
Following the end of the consultation period in April, ASIC has been considering the submissions on CP 308 and its response. A number of submissions raised the need to consider PYSP changes to the law. ASIC will take PYSP into account in the finalisation of its response to proposals outlined in CP 308.
ASIC expects to provide a report addressing its final position on the consultation proposals in the second half of 2019.