MDA review timetable to be pushed out to next year
The Australian Securities and Investments Commission (ASIC) will push back its timetable for the release of updated regulatory guides and class orders for managed discretionary accounts (MDA) by four months to April 2014.
ASIC released Consultation Paper 200 ‘Managed Discretionary Accounts: Updates to RG 179' in May of this year seeking submissions and comments, with an expected timetable of late this year for the release of an updated regulatory guide.
The paper and submissions were aimed at examining whether ASIC should revoke the ‘no action' position for MDAs operated on regulated platforms, and whether uniform net tangible asset (NTA) requirements should be imposed across the board on all types of MDAs or should take account of their different structures.
ASIC stated the review had been driven by the growth of MDA offerings and increased adviser interest in the vehicles in the lead-up to the Future of Financial Advice reforms. It had received 39 submissions on the matter.
In comments made to Money Management, an ASIC spokesperson said the change in timing was brought about due to the content in the submissions.
"We now expect to be in a position to release our updated regulatory guidance in April 2014, taking into account the submissions we have received on CP 200. Given this change, we will give consideration to timing of transition periods for commencement of our final policy position."
Institute of Managed Account Providers (IMAP) chair Toby Potter said the no action and NTA issues were still unresolved and had the potential to change the business models of MDA providers.
He stated that IMAP expected ASIC would enter into another round of consultation, but at present there would be only two months between the release of the updated regulatory guide and its scheduled implementation date.
He said that MDA providers expect the implementation date to move, possibly to 2015, given the revised time frames under consideration by ASIC.
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