Gov’t reneged on promised FSRA regulations, says Labor

The FederalGovernment reneged on its promises to the Labor party over the make-up of the Financial Services Reform Act (FSRA) regulations, Labor party senator Stephen Conroy has claimed.

The Shadow Minister for Financial Services made the claim last week amidst a growing industry backlash over his last minute bid to have some of the FSRA regulations disallowed.

Conroy said the bid to block the regulations, made when Labor issued a motion in the senate late last month, is part of Labor’s plan to extend the FSRA disclosure regulations which currently apply to superannuation to other managed investment products.

In a sometimes heated meeting with members of the Investment and Financial Services Association (IFSA) last week, Conroy said the Government had agreed to Labor’s disclosure conditions before the FSRA was passed by the Senate last year, but did not honour its commitment when the regulations were released early in 2002.

However, a spokesperson for the Parliamentary Secretary to the Treasurer, Senator Ian Campbell, said last week it had never been the Government’s intention to enforce the more prescriptive superannuation disclosure requirements on other managed investments, suggesting the issue could be headed for a protracted political battle.

As a result of the Labor party’s motion to disallow the regulations, the provisions must now pass through the Senate, where the issue is unlikely to get a hearing until September.

The uncertainty over the regulations has earned Labor the ire of many in the financial services sector, including groups like Colonial First State Investments, which have already issued some disclosure documents based on the regulations that are now in limbo.

But Conroy last week refused to back down, saying a common disclosure regime across all investment products was the best outcome for consumers.