In April this year, Cabinet agreed that KiwiSaver scheme providers should be required to periodically publish information on fees, returns, and asset allocations in a prescribed manner in order to provide investors, advisers, regulators, and market commentators with consistent and comparable information on such matters.
The Financial Markets (Regulators and KiwiSaver) Bill 2010 currently before the Commerce Select Committee provides the government with a regulation-making power to impose periodic reporting requirements on issuers, with the intention that this will be first applied to retail KiwiSaver schemes. The Bill is expected to come into force in the first half of 2011, with regulations being drafted and promulgated in the second half of the year. It is likely that periodic reporting for retail KiwiSaver schemes will be mandatory from 2012/13.
The Ministry of Economic Development has now released a discussion document on periodic disclosure for retail KiwiSaver schemes to elicit feedback and commentary from stakeholders that will guide the development of regulations for the prescription and form of that periodic reporting.
The discussion document canvasses four key areas where greater prescription and standardisation in reporting obligations is expected to improve the transparency and comparability of information. These are:
- fund fees and charges;
- fund performance and returns;
- asset allocation and fund holdings; and
- fund manager tenure, key personnel and conflicts of interest.
It should be noted that the issues and options raised in this discussion document may guide future requirements relating to disclosure by issuers more generally.
The closing date for submissions is 11 March 2011.