IFSA – Making the most of a window of opportunity

Nearly two years after the Wallis Inquiry, the long awaited reforms to the regulation of the nation’s financial markets are at last on the home stretch, with the release of the CLERP 6 (Corporate Law Economic Reform Program) consultation paper.

During the past two years, the CLERP 6 program has been successively led by both Parliamentary Secretary Ian Campbell and Minister Joe Hockey. It has had a change of leadership within Treasury and has survived a Federal election.

Hopefully, before year-end it will be translated into draft legislation, which should then be put before the Parliament during its spring '99 sittings. Given the proposed July 2000 start date, it is critical that we have legislation passed well before then, allowing time for sensible implementation, alongside all the other government instigated changes.

Conscious of the importance of making a well-considered and timely response, IFSA has conducted an intensive member workshops on the proposals. The workshops, held in Sydney and Melbourne, attracted more than 100 IFSA member company representatives; also in attendance were officials from Treasury and ASIC. In true convergence style, the workshop was an integrated affair with life insurance, wholesale and retail investment issues on the discussion table at the same time.

For IFSA members there are three key questions when it comes to operating under the CLERP 6 proposals, namely:

What will be the disclosure regime for my products and services?

What will be the licensing requirements for offering financial products and services?

How will the markets in which we invest be regulated?

Bridging these questions, and of great interest to IFSA members, is the opting up proposal under which clients may access wholesale markets by simply signing a declaration opting to be treated as a wholesale client (and vice verse). The consequence of such an election would be that disclosure and conduct rules covering disclosure, complaints, and the provision of financial services guide would not apply.

The liability of licensees is a critical matter for IFSA, especially the proposal to have joint and several liability for the conduct of authorised representatives operating under more than one licensee. No doubt the life insurance multi-agents who currently operate under this provision will be closely examining these CLERP 6 provisions. CLERP 6 gives all registered persons a two year transition to obtain a license under the single licensing provisions, but during this time, the existing authorisation and disclosure arrangements will remain in force.

Another key objective for IFSA members is to achieve a single disclosure regime for superannuation, life insurance and managed investment products.

This single regime must achieve two goals. Firstly it must allow consumers to be in a position to make well-informed decisions in relation to medium to long-term savings and investment vehicles. Secondly, it must allow product providers to realise the savings that should accrue from harmonised product disclosure. Both these goals must be achieved if the Wallis dividend is to be realised.

The CLERP process offers IFSA's members a wonderful opportunity to improve the quality of their dialogue with their customers, to increase investor confidence in our industry, as well as to improve our competitiveness through reduced costs.

We look forward to continuing consultation with Government in this regard.

Richard Gilbert is the deputy chief executive officer of the Investment and Financial Services Association (IFSA).

Conference Update

IFSA will hold its first comprehensive financial services conference at the Melbourne Convention Centre from 19 - 21 July 1999. The theme of the conference is "Co-opetition...friends, foes or maybe both?".

In keeping with this theme, the conference will look at ways in whichco-opetitionhas worked to form new markets, new products, and new avenues for distribution and the implications for the financial services industry.

The program has been designed to provide delegates with the latest information on investment management, retail marketing, regulatory and business operations issues. Prominent Australian and international speakers will address topics including: tax reform, valuing technology companies, CLERP 6, disability insurance, and generating value after a merger.

We've also incorporated some challenging and interesting activities for delegates.

Early bird brochures are about to be released. Details on conference registration are available from Leanne Howard, IFSA Conference Secretariat on ph: 02 9422 2611.

We are also very pleased to welcome the following conference sponsors:

Joint Gold Sponsors: Minter Ellison, Commonwealth Bank and PMSC

Silver Sponsors: IBM

Bronze Sponsors: Perpetual Fund Services and KPMG

Special Sponsorships: Sydney Futures Exchange and DST International.

For more information on sponsorship and exhibition opportunities please contact on Deanna Lane on ph: 02 9375 2219.<I>