RG 97 Disclosing fees and costs in PDSs and periodic statements
Issued 29 November 2019
This guide, RG 97, is for issuers of most superannuation products and managed investment products and operators of notified foreign passport fund products issued to retail clients, which are required to make disclosure in accordance with the enhanced fee disclosure regulations.
It provides guidance on how to disclose fees and costs in Product Disclosure Statements (PDSs) and periodic statements.
Note: Information in this guide is also relevant to issuers of investment life insurance products and operators of investor directed portfolio services (IDPSs) and managed discretionary account (MDA) services.
Modifications to legislative obligations described in RG 97 are made in the following instrument: ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070. This instrument sets out new requirements that apply following the end of the transition period, described below.
The transitional version of RG 97 (released March 2017) will continue to be relevant during the transition period. However, industry can obtain immediate benefit from the clearer guidance in the updated version of RG 97 (released November 2019) about existing fees and costs disclosure requirements that have not changed.
Changes arising from November 2019 release
The main changes to fees and costs disclosure made through the updated RG 97 are:
- a re-grouping of values in the re-named fees and costs summary to more clearly show fees and costs that are ongoing and those that are member-activity based
- a simplification of on-going fees and costs into three groups – Administrative, Investment and Transaction
- including a single ‘Cost of Product’ figure in a PDS, and
- simplifying how fees and costs are presented in periodic statements.
The guidance and associated legislative instrument have been drafted to make the regime more practical for industry, and to promote compliance by issuers with their legal obligations as:
- the guidance has separate sections dealing with superannuation and managed investment products
- modification of the legislation has been done by way of a legislative instrument that includes a consolidated version of Schedule 10 of the Corporations Regulations 2001, and
- the costs categories that need to be counted in the disclosed amounts have been clarified, including confirming that some categories that are hard to accurately measure consistently and have limited value for users, need not be included (eg implicit market costs).
The new fees and costs disclosure requirements—in updated RG 97 and ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070—will apply to:
- PDSs issued on or after 30 September 2020, and
- periodic statements (ongoing or on exit) for a reporting period that commences on or after 1 July 2021.
Issuers may 'opt-in' to the updated periodic statement requirements if the periodic statement is for a reporting period that:
- commences on or after 1 July 2020, or
- ends on a day that is on or after 1 July 2020 if the reporting period ends on the exit date because the holder of the product ceased to hold the product on the exit date.
There is no ability to ‘opt-in’ early to the new requirements for PDSs.
For the requirements that apply before the commencement of ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070, see Class Order [CO 14/1252] Technical modifications to Schedule 10 of the Corporations Regulations and transitional Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (released March 2017).
ASIC expects industry to comply with the fees and costs disclosure requirements found in CO 14/1252, until the transition period ends. ASIC will monitor fees and costs disclosure going forward and will consider taking action against misconduct.
In February ASIC held roundtable meetings in Sydney, Melbourne and Brisbane to discuss the updated RG 97.
- Download RG 97, (released November 2019)
- ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070
For the requirements before the commencement of ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 see:
- Transitional version of RG 97 released March 2017; and
- Transitional Q&As
- Class Order [CO 14/1252] Technical modifications to Schedule 10 of the Corporations Regulations
- ASIC Corporations (Amendment) Instrument 2019/1071 which amended [CO 14/1252]
- CP 308 Review of RG 97 Disclosing fees and costs in PDSs and periodic statements
- REP 637 Response to submissions on CP 308 Review of Regulatory Guide 97
- REP 638 Consumer testing of the fees and costs tools for superannuation and managed investment schemes
- 19-328MR ASIC releases updated RG 97 on fees and cost disclosure
The updated RG 97 follows public consultation after an external expert review of the regulatory guide as well as consumer testing of proposed changes to the presentation of fees and costs. See RG 97 review and consultation and CP 308.
If you have questions about the fee and costs disclosure requirements, please email ASIC at firstname.lastname@example.org.