Future of Financial Advice

Exposure Draft - First Package of FOFA Regulations

The Corporations Amendment (Future of Financial Advice) Bill 2012 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012 (the Bills) were introduced into the House of Representatives on 13 October 2011 and 24 November 2011 respectively. Both Bills passed the House of Representatives on 22 March 2012. The Bills amend the Corporations Act 2001 to introduce the Future of Financial Advice reforms.

To accompany the measures in the Bills a number of amendments to the Corporations Regulations 2001 (the Principal Regulations) will be made.

The first package of such amendments is the Corporations Amendment Regulation 2012 (No.  ) which is in respect to the provisions relating to charging ongoing fees to clients and conflicted remuneration as proposed by the Bills.  Specifically, these amendments to the Principal Regulations:

  • exclude product fees from the definition of an ‘ongoing fee arrangement’;
  • introduce a delayed application date of 1 July 2013 for the ban on conflicted remuneration with respect to group life risk insurance inside choice superannuation funds and all life risk insurance policies in default superannuation funds;
  • exclude benefits given for advice relating to interests in time-sharing schemes from the ban on conflicted remuneration;
  • provide further details to the exemptions from the ban on conflicted remuneration for certain non‑monetary (‘soft-dollar’) benefits and introduce record keeping requirements in relation to those benefits.

The documents linked below provide an exposure Regulation and a draft Explanatory Statement for the first package of regulations with respect to the measures proposed in the Bills.

Consultation Documents

Corporations Amendment Regulation 2012 (No. ) 169KB 435KB
Explanatory Statement 88KB 152KB