A regulation made yesterday provides grandfathering for benefits given by platform operators under arrangements entered into before the application day (normally 1 July 2013). This is the same as the existing grandfathering for benefits given by anyone else. The regulation will be welcomed by the financial services industry.
A draft regulation previously released by the Government will, if made in its current terms, nevertheless exclude grandfathering where the benefit relates to an investment in a new financial product after 1 July 2013. However, the draft regulation only extends to benefits given by people other than platform operators. In its current form, benefits given by platform operators would receive more concessional grandfathering than benefits given by others. The regulation has yet to be finalised and made. The final text will be important for all providers of benefits which may be conflicted remuneration.
Post-script: Since this alert was first prepared, we have become aware that Treasury has indicated that the Government does not intend to finalise and make the draft regulation referred to.