ASIC acts against new disclosure documents
THEAustralian Securities and Investments Commission(ASIC) has issued 13 interim stop orders as a result of an ongoing review of the new product disclosure regime under the Financial Services Reform Act (FSRA).
The regulator says, of the 264 product disclosure statements (PDS) that have so far been lodged to comply with the new regime, it has conducted preliminary reviews of 87 and full reviews of 47.
According to ASIC, the 13 interim orders were issued after full reviews of a range of PDS’ across superannuation, insurance and derivatives products. Of these, nine have since lodged supplementary PDS’, while the remaining four have issued replacement PDS’.
ASIC executive director of financial service regulation Ian Johnston says the regulator has identified a number of deficiencies in the information provided to consumers in PDS’.
These include the use of undefined or unexplained terms, the quality of information about a product issuer’s ability to participate in the profits of the product and information about the issuer’s ability to vary fees at its discretion.
“ASIC is carefully monitoring the new PDS regime as more products and more complicated products enter the market,” Johnston says.
“ASIC is committed to working with the industry during the transition period to ensure that PDS’ meet the new disclosure requirements, and we will take appropriate action when these legal requirements are not met.”
The FSRA requires that a PDS be issued to all retail clients for all financial products, other than shares or debentures. Product providers must comply with the new disclosure regime from March 11, 2004, unless they choose to ‘opt-in’ to the regime earlier.
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
