The Superannuation Legislation Amendment (MySuper Measures) Regulations 2013 (Regulations) were registered on 28 June 2013. Among other things, the Regulations amend the fee disclosure rules for superannuation products and managed investment products in the Corporations Regulations 2001 (Cth).

The Regulations make a number of changes to the fee disclosure rules for superannuation products given the Stronger Super reforms. This has resulted in minor flow-on amendments to the fee disclosure rules for managed investment products.

For example, the Regulations amend certain definitions in Schedule 10 as they relate to superannuation products to adopt definitions in the Superannuation Industry (Supervision) Act 1993 (Cth) for fees which may be charged for a MySuper product. The Regulations therefore make consequential drafting changes to the relevant definitions in Schedule 10 to clarify the definitions applicable to managed investment products.

Since disclosure of fees and costs information in Product Disclosure Statements (PDSs) and periodic statements is heavily prescribed, responsible entities will need to pay close attention to the changes.

Effective date for the changes

The new fee disclosure rules as they relate to managed investment products will affect  PDSs issued from 1 July 2014 and periodic statements issued for the reporting period ending 1 July 2014.

However, under the transitional provisions inserted by the Regulations into Chapter 10 of the Corporations Regulations, it is open to responsible entities to opt in before 1 July 2014 and issue a PDS in accordance with the new fee disclosure rules if they wish to do so.

Summary of the changes

The changes to the fee disclosure rules as they relate to managed investment products include:

Part 1 of Schedule 10:

  • repealing the definitions of ‘adviser service fee’ and ‘termination fee’;

  • adopting a two-limb definition (one relating to superannuation products, the other for managed investment products) for existing definitions such as ‘buy-sell spread’ and ‘switching fee’, and inserting new definitions such as ‘advice fee’ and ‘exit fee’; and

  • Other incidental drafting changes to certain definitions.

Part 2 of Schedule 10

  • replacing the existing Fees and Costs Template tables in Divisions 1 and 2 with updated tables; and

  • making minor changes to Divisions 3, How to Fill in the Template, Division 4, Additional Explanation of Fees and Costs,  Division 5, Example of Annual Fees and Costs, Division 6, How to fill in the Example of Annual Fees and Costs, and Division 7, Consumer Advisory Warning.

Part 3 of Schedule 10:

  • Making minor changes to Part 3 of Schedule 10 (which deals with fees and costs in periodic statements).

If a PDS is issued between 1 July 2013 and 30 June 2014 without complying with the new fee disclosure rules, the responsible entity will need to issue updated fees and costs information on 1 July 2014. Responsible entities may therefore wish to consider opting in to the new rules.