On 24 March 2014, the Government announced a freeze on the implementation of the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 ("the Bill") to engage in further consultation with all industry stakeholders.
The 'freeze' period represents a second opportunity for stakeholders to make submissions in respect of the proposed amendments to the Future of Financial advice ("FOFA") legislation.
The 'Freeze' and ASIC enforcement
While ASIC previously announced that it would not take enforcement action in relation to the specific FOFA provisions that the Government is planning to repeal, on 25 March 2014 the regulator flagged a possible change to this policy in response to the freeze.
In the circumstances, financial services providers are advised to hold off on introducing any internal processes or (particularly) pay structures that conflict, or may conflict, with the legislation.
Assistance with Submissions
The provisions of the Bill have been referred to the Senate Finance and Public Administration Legislation Committee for inquiry and report by 16 June 2014.
No closing date has been set for submissions. If you would like us to assist you with preparing a submission to the Senate Finance and Public Administration Legislation Committee, please contact us.
Proposed Amendments Omitted from the Bill after Initial Consultation Period:
The following proposed amendment was omitted from the Bill after the initial consultation period:
- Expanding the range of circumstances under which commissions may be paid on life (risk) insurance products provided within superannuation to include circumstances where personal advice has been provided on these products.
For more information
To view the Bill in full, click here.
To view the Explanatory Memorandum, click here.
To view the Second Reading Speech, click here.
To view Treasury's Detail-Stage Regulation Impact Statement, click here.
To view the Finance Minister's Press Release announcing the freeze, click here.