Nominating an FDS anniversary date

[Archived User]

If choosing to take up ASIC’s no action position of RG245.62, and if choosing a date of 1 January 2014 for example, when do the clients need to be notified?

[amelia-w]

Fee recipients generally need to determine the date they first entered into an ongoing fee arrangement with each existing client.  This depends on the circumstances of the arrangement (RG245.59).  The FDS must be given no more than 30 days after the anniversary of this date each year.

If it is impossible or unreasonably onerous to determine the day an ongoing fee arrangement was entered into with an existing client, ASIC provides some alternatives.  Under one of these, per RG245.62, ASIC will take ‘no action’ if you:

a) notify the client in writing of the date (between 1 July 2013 and  31 January 2014)  you will treat as the anniversary of the day on which  the ongoing fee arrangement was entered into;
b) explain to the client  the significance of that date for the purposes of the FDS obligations; and
c) provide the client with an FDS within 30 days of the first anniversary of that date.

Clients may be given the information in a) and b) above, at the same time as the FDS itself (RG245.63) or any time before that.  So if you were to choose 1 January 2014 as your disclosure date, the FDS and notice must be provided by no later than 31 January in order to meet ASIC’s no action requirements.

If you require further information, please contact our office.

Author: Andrew Ham

Co-contributor: Joel Lazar

[Danielle Ludbey]

Thank you Joel for your reply – great news.

[Author]

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