Regulatory hurdles to incorporation by reference
The Association of Superannuation Funds of Australia (ASFA) has made clear the regulatory and logistical obstacles standing in the way of delivering shorter financial services documentation and incorporation by reference.
In a submission to the Australian Securities and Investments Commission (ASIC), ASFA has strongly supported incorporation by reference and online disclosure, but has made clear it believes considerable obstacles need to be overcome.
The ASFA submission, released this month, suggests that for incorporation by reference to operate effectively, product issuers must be able to provide different disclosure material to different types of clients, but argues that the regulatory environment pertaining to this is contradictory.
It said on this basis, ASIC should issue a guidance note to the industry confirming what types of information could be excluded from a Product Disclosure Statement and confirm that ‘targeted disclosures’ are permissible under the incorporation by reference provisions.
The ASFA submission has also pointed to industry concerns about unintended consequences flowing from making changes to incorporated documents and suggested that if incorporation by reference and online disclosure is to operate efficiently and effectively, the regulator will need to provide guidance or class order relief.
The submission also points out that there is industry concern that any alteration of a particular incorporated document is viewed by ASIC as creating a new document that requires a unique identifier and requested confirmation as to whether, under the current law, a broad interpretation could be applied if the essential nature of a document did not change.
AUTHOR
Mike Taylor
Recommended for you
With a large group of advisers expecting to exit before the 2026 education deadline, an industry expert shares how these practices can best prepare themselves for sale to compete in a “buyer’s market”.
Australia has marked a decade among the best countries for retirement, according to Natixis, but with high inflation threatening their retirement goals, a third say they would get professional advice to improve their chances.
When it comes to the risks of acting as a responsible manager at an AFSL, compliance firm Holley Nethercote has shared a range of red flags that could see them facing disciplinary action from the corporate regulator.
Wealth management platform provider Netwealth has announced a partnership with FinClear to streamline trading capabilities for advisers.
