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Home Forums Australian Financial Services Licensing (AFSL) Forum Fee Disclosure Statements #2

This topic contains 3 replies, has 2 voices, and was last updated by  KMack 8 years, 4 months ago.

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  • #3269 Reply

    KMack

    A blank response was posted to the second scenario I posted under the topic called Fee Disclosure Statements, and that topic now appears closed. Are there details missing from the response?

    Thanks for your consideration.

    #3270 Reply

    KMack

    If you have any comments on the following, this would also be appreciated:

    – It appears that the ASIC guidance at RG 245.61 and RG245.62 presents two different options/positions.

    – It appears that the option presented at RG245.61 (which provides one EXAMPLE, being to provide the FDS to all existing clients within 30 days of 1 July 2013), leaves room for another “common-sense approach” to be determined (which is completely separate to any approach determined under RG245.62)

    – It appears to follow then, that such a “common-sense approach” for existing clients who already receive comprehensive annual fee disclosure as part of their annual review, could be to continue using existing annual review dates (which may or may not relate to the original date arrangements were entered into), so long as there is consistency of approach?

    #3272 Reply

    Megan Jaksa
    Member

    Hi KMack,

    We posted a response to your second post under the topic ‘Fee Disclosure Statements’ on May 20 (post 3267).  It should be showing on the forum and you should be able to continue to comment.  Let us know if you still cannot see the response and we will have our IT people look into it.

    In relation to your latest query, RG245.61 and 245.62 address slightly different issues.  RG245.61 states that where it is impossible or unreasonably difficult to identify the date that an ongoing fee arrangement was entered into, ASIC expects fee recipients to enter into a common sense approach.  You are correct that the example is just one of many common sense approaches that could be taken.  However, the use of an alternative “common sense approach” runs the risk of ASIC taking enforcement action if it did not agree with that approach.

    RG245.62 states that ASIC will not take enforcement action against a fee recipient if they follow the process in RG245.62(a)-(c).  In the scenario you describe, we would suggest following this process to take advantage of ASIC’s no-action position.  However, if you nominate dates after 31 January 2014 that you are treating as the anniversary, then you will not be covered by ASIC’s no-action position and you may be at risk of enforcement action.

    We note that once you have issued the initial FDS, you could then consider ‘resetting’ the disclosure day by issuing a resetting FDS as outlined in RG245.71 if you wish to reset your disclosure dates to the second half of 2014.

    Please contact our office if you wish to discuss further.

    Author: David Court

    Co-contributor: Megan Jaksa

    #3276 Reply

    KMack

    Thanks for the response Megan

    Post # 3267 on May 20 is still showing as blank and no comments fields appear. If you could investigate, that would be great.

    I’ll absorb the other details you’ve provided.

    Many thanks again for your time.

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