Government moves on product consolidation
|
|
Proposed legislation has been released on product rationalisation for managed funds and life insurance industries that will ensure investors are not disadvantaged as they are transferred to newer products.
The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, released the consultation paper today following the publishing of an issues paper on product rationalisation in June 2007.
“The proposed product rationalisation mechanism offers a specific solution to the range of issues involved in the process of removing outdated products and transferring investors into newer and better products,” Bowen said.
“Importantly, a proposed ‘no disadvantage’ test would ensure investors are not disadvantaged by product rationalisation.”
Bowen said the paper also outlined proposed tax relief for product rationalisation, with restrictions to protect the integrity of the proposed tax concession. The proposals and the introduction of a product rationalisation mechanism would benefit investors by enabling them to be transferred into modern products with superior features, at the same time removing the risks of error and fraud in the financial system by closing outdated legacy products, Bowen stated.
“The proposed solution seeks to strike a balance between protecting the rights and benefits of investors while offering product providers a practical and flexible process for developing product rationalisation mechanisms,” he said.
“The development of product rationalisation mechanisms must also look to reduce compliance costs for the Australian financial services sector,” Bowen stated.
Submissions in response to the consultation paper close on February 26, 2010.
Recommended for you
Inefficient data processes and systems mean advisers are spending over half of their time on product implementation and administration at the expense of clients, according to research.
With the regulator announcing its enforcement focus for 2025 last week, law firm Hall & Wilcox examines the areas which have dropped down the list in priority for the regulator.
South Australian financial advice and accounting business Perks has extended its paid parental leave program from 12 to 26 weeks, putting it on par with big four firms.
Mason Stevens has tapped Investment Trends’ head of growth, alongside two other hires, to bolster its distribution team.
