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Client Update: ASIC extends transition period for fees and costs disclosures, and delays consultation paper to January 2019

14 December 2018

In brief: ASIC has extended the transition periods for certain fees and costs disclosure obligations applicable to superannuation funds and managed investment schemes by a further year, pending the release of its consultation paper on the regime. It has also delayed the expected release date for the consultation paper until January 2019. Senior Associate Stephanie Malon and Lawyer Katerina Dandanis report.

Time to read

2 min read

Background

Darren McShane's much anticipated expert report on the fees and costs disclosure regime was released in July this year. It contained a number of recommendations to ASIC to amend the regime (see our Unravelled: Expert review into fees and costs disclosure – further changes ahead). ASIC had previously stated that it would provide a consultation paper in response to the review by the end of 2018. But anyone who had the consultation paper on their Christmas wish-list will be disappointed – ASIC has now delayed the expected release date to January 2019.

Further one-year extension of transition periods in [CO 14/1252]

With its consultation paper still on the way, ASIC has extended the dates for compliance with the enhanced fees and costs disclosure regime in [CO 14/1252] by a further year. The transition dates had previously been extended by one year following the appointment of Mr McShane to conduct his expert review of the regime.

Specifically, ASIC Corporations (Amendment) Instrument 2018/1088 extends the dates for compliance with the following aspects of the fees and costs disclosure regime from 2019 to the equivalent dates in 2020. This means that:

  • superannuation funds can continue to disclose property operating costs in the 'Additional explanation of fees and costs' part of the PDS (rather than as part of investment fees or indirect costs) until 30 September 2020; and
  • managed investment schemes and superannuation funds will benefit from transitional periods for certain periodic statement disclosures for reporting periods ending before 30 June 2020.

What's next?

Industry will be relieved that it won't need to incur (further) time and expense in changing its approach while ASIC is consulting on the regime. It's worth noting that ASIC's media release specifically notes that it could propose changes to the treatment of property operating costs.

No doubt, industry will be looking forward to celebrating the new year reviewing and responding to ASIC's consultation paper.

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