LIC stamping fee exemption to be extended
The ban on conflicted remuneration to listed investment companies (LICs) will be extended following a consultation by the Treasury, removing an impediment to the Financial Advisers Standards and Ethics Authority (FASEA) exam extension legislation.
This followed a public consultation initiated by Treasurer Josh Frydenberg on the merits of the stamping fee exemption in relation to LICs which began in January, 2020.
The Labor Party had wanted to debate the LIC issues, which were part of an omnibus bill which included the FASEA extension.
While the Treasury acknowledged LIC capital raisings ‘had largely ceased’ since COVID-19, the Government said it was important the ban was extended ahead of any resumption in capital raising activity and clarity would address any risk of consumer harm.
Frydenberg said: “Clarifying these arrangements will address any related risk of consumer harm and ensure that stockbrokers, financial advisers and investment managers are clear about the regulatory settings that will apply in this area and investors can continue to invest with confidence in these products.
“Extending the ban on conflicted remuneration to LICs will address risks associated with the potential mis-selling of these products to retail consumers, improve competitive neutrality in the funds management industry and provide long term certainty so that this segment of Australia’s capital markets can continue to operate effectively and provide investors with opportunities to diversify their investments.”
Equity and debt securities in trading companies, real estate investment trusts and listed infrastructure investments were unaffected by the changes.
The arrangements would be monitored by the Australian Securities and Investments Commission.
AUTHOR
Laura Dew
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
