FSC opposes further regulation of LTCs
The Financial Services Council (FSC) has opposed further regulation of licensed trustee companies (LTCs) following proposals put forward by the Corporations and Markets Committee (CAMAC).
CAMAC yesterday released a report called Administration of Charitable Trusts, which proposed the introduction of a statutory ‘fair and reasonable' requirement for all fees and costs charged against charitable trusts, also calling for the Australian Charities and Not-for-Profit Commission to conduct audits of some trusts.
"CAMAC considers that the primary intent of a donor is to achieve the benevolent and philanthropic purposes or objectives for which that person established and funded the charitable trust, within the time frame of the trust, and in an effective and efficient manner," the committee stated.
"Administrative arrangements for operating a charitable trust should be assessed according to the extent to which they advance or promote that primary intent."
However, the FSC highlighted the report confirmed that licensed trustees in Australia are operating efficiently and opposed further change to the regulation of this sector.
FSC chief John Brogden said if the recommendations in the CAMAC report were implemented, professional licensed trustees would be subject to more regulation — despite being the most heavily regulated part of the charitable trust sector.
"Licensed trustee companies are already very well regulated," Brogden said. "Yet unlicensed providers, which are estimated to account for over 80 per cent of the market in some segments, do not have anywhere near the same level of oversight.
"These unlicensed providers operate outside of the Corporations Law licensing regime, leaving consumers exposed because fee caps, disclosure rules and professional standards do not apply," Brogden added
These bodies included charitable trusts administered by other types of charitable entities, apart from Licensed Trustee Companies (LTCs).
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