ASIC has today released a consultation paper seeking feedback on proposed changes to the fees and costs disclosure regime for managed investment schemes and superannuation.
To assist industry in understanding the proposals, the consultation paper includes a proposed updated Regulatory Guide 97 Disclosing fees and costs in PDSs and periodic statements (RG 97), as well as draft amendments to Schedule 10 of the Corporations Regulations.
Concurrently with the industry consultation, ASIC will undertake consumer testing of some aspects of the proposals.
Consultation Paper 308 Review of RG 97 Disclosing fees and costs in PDSs and periodic statements (CP 308) reflects ASIC’s commitment to ensuring that consumers seeking information on fees and costs receive transparent and useable information that helps them understand fees and costs, compare products, and make confident and informed choices.
ASIC also seeks to ensure that the proposed fees and costs disclosure regime is practicable for industry.
CP 308 sets out ASIC’s response to recommendations from a review of the regime by external expert, Mr Darren McShane. Report 581 Review of ASIC Regulatory Guide 97: Disclosing fees and costs in PDSs and periodic statements (REP 581) was released in July 2018 following extensive industry consultation.
In preparing CP 308, ASIC considered feedback provided by industry to Mr McShane during his review.
ASIC proposes to take forward key recommendations from REP 581 that relate to:
- simplifying how fees and costs information is presented to consumers
- reducing data inputs, including eliminating the requirement for fees and costs disclosure to incorporate some costs categories, particularly property operating costs, borrowing costs and implicit costs, and
- making disclosure for managed investment schemes more consistent with superannuation.
ASIC welcomes industry views on the proposed updates to the fees and costs disclosure regime. The consultation is open for a period of three months, with comments due by 2 April 2019. Further information about the consultation’s progress will be available on the ASIC website.
In light of potential changes to the requirements, ASIC’s oversight of fees and costs disclosure will continue to focus on ensuring that issuers are not misleading consumers about fees and costs. ASIC will continue to monitor disclosure and advertising.
REP 581 was prepared by Darren McShane, an external expert appointed by ASIC in November 2017 to conduct a review of fees and costs disclosure in superannuation and managed investments. The expert review was initiated by ASIC in response to feedback from the industry around challenges with the practical implementation of RG 97. As part of the review Mr McShane engaged with more than 120 industry stakeholders, and considered approaches to fees and costs disclosure in other jurisdictions.