Labor claims win on disclosure amendments

The Federal Opposition is claiming a key victory on dollar disclosure within the new Financial Services Reform regime, following the passage last week of amendments to the Financial Services Reform Amendment Bill enforcing disclosure requirements relating to fees and charges.

The Opposition spokesman on Financial Services, Senator Stephen Conroy says the amendments, supported by the Opposition and the Australian Democrats, insisted on dollar disclosure becoming a requirement under law.

“The amendments will require ‘dollar disclosure’ for fees and charges and other amounts in disclosure documents,” Conroy says.

He says that the Government has also committed to replacing existing regulations which require dollar disclosure “where reasonably practicable” with new regulations requiring dollar disclosure “unless theAustralian Securities and Investments Commissiondetermines that it is not possible due to compelling reasons”.

Conroy says the Opposition believes the Government’s “reasonably practicable” test sets the threshold for disclosure too low and creates a loophole for product issuers and other participants in the financial services industry to avoid disclosing in dollar terms.

He says the Opposition therefore welcomed the Government’s decision to ditch the “reasonably practicable” test as it was fundamentally flawed and “designed for commercial expediency not consumer protection”.

“Labor believes that fees and charges should be disclosed to consumers in dollar terms and that only where dollar disclosure is not possible, should disclosure in percentages or by other means by considered,” Conroy says.