ASIC to clarify dollar disclosure requirements

TheAustralian Securities and Investments Commission(ASIC) is set to release the details of its ongoing work in the area of disclosure in light of last week’s commentary on its revised dollar disclosure regulations.

The details surround licensee (and their representatives) and product issuer obligations as of January 1, 2005 in relation to the dollar disclosure of various fees, benefits, costs and interests within statements of advice, product disclosure statements and periodic statements.

“Consumers need clear disclosure of fees, costs and benefits to make informed decisions about financial products [and] domestic and international research has consistently shown that disclosure in dollars is the most effective approach,” ASIC executive director of financial services regulation, Ian Johnston says.

Despite the impending dollar disclosure requirements the regulations provide that the above matters need not be disclosed as amounts in dollars if ASIC makes a determination that, for a compelling reason, dollar disclosure is either not possible, unreasonably burdensome or contrary to client interests.

ASIC will release a policy proposal paper in July or August detailing how it will approach disclosure requirements, together with how it proposes to use its power to make dollar disclosure determinations.

ASIC notes that the Government announced a fees and charges disclosure package, including a single-figure fee measure, on 16 June 2004 (see the Parliamentary Secretary to the Treasurer’s Media Release Simple disclosure of superannuation fees and charges).

ASIC will also take into account any implications the Government’s fees and charges disclosure package may have on the implementation of dollar disclosure obligations when developing its policy.

“ASIC expects licensees and product issuers to already be planning how they will comply with the dollar disclosure obligations. The six-month transition period exists for licensees and product issuers to make any necessary adjustments to their systems, processes and documents so that they can comply with the dollar disclosure obligations,” Johnston says.