ASIC roundup

ASIC has issued a series of papers on FSR including :

• Secondary service provider FSR relief



• Non-cash payment facilities policy proposal paper



• PDS Guidance: ASIC has provided guidance for product issuers preparing and
  reviewing Product Disclosure Statements (PDSs). The guidance highlights
  a number of compliance issues product issuers should take into account
  to ensure that their PDSs meet both the content and presentation
  requirements of the law.
  
  The guidance follows an ASIC review of over 100 PDSs
  prepared before 11 March 2004. ASIC also announced that it plans to
  conduct nation-wide campaigns into PDSs issued by the financial
  services industry, and the findings from its recent review will be used
  to focus on specific disclosure issues for particular product classes.

posted at 6:09 AM

FSR Breach Reporting Guide

ASIC has issued a breach reporting guide for holders of an Australian financial services (AFS) licence.

The guide gives licensees examples of some breaches which may be significant. It also provides useful guidance on how to report a breach to ASIC, as well as the information that should be included in a breach report.

Under s912D of the Corporations Act, licensees are required to notify ASIC in writing of any significant breaches or likely breaches of their obligations, as soon as practicable and in any event within five business days of becoming aware of the breach or likely breach.

posted at 9:01 AM

Time critical FSGs

ASIC has issued a class order [CO 04/1055], Information in a Financial Services Guide given in a time critical situation, to facilitate the provision of a Financial Services Guide (FSG) in a time critical situation under the Corporations Act 2001 (the Act).

posted at 8:14 AM

Dollar Disclosure

The Australian Securities and Investments Commission (ASIC) has announced that it has granted relief to extend the date for compliance with the dollar disclosure regime from 1 January 2005 to 1 March 2005.

ASIC expects to publish a final policy statement on dollar disclosure in November 2004. This policy statement will specify in what circumstances, if any, ASIC might determine that dollar disclosure is not possible, unreasonably burdensome or contrary to clients' interests.

Under the dollar disclosure provisions, providing entities and product issuers will be obliged to disclose various fees, benefits, costs and interests as amounts in dollars in the following documents:

Statements of Advice (SoAs);

Product Disclosure Statements (PDSs); and

periodic statements.

posted at 1:35 PM

ASIC Inspection Report

ASIC has issued a report containing its findings on a program of randomly conducted verification visits on Australian financial services (AFS) licensees.

'Most of the AFS licensees visited by ASIC demonstrated that appropriate procedures are in place and working well in practice. Where ASIC identified deficiencies, these issues were generally straightforward and easily addressed by the licensee', Ms Pamela McAlister, Deputy Executive Director of Financial Services Regulation, said.

In a small number of cases ASIC will be undertaking a further compliance review.

The visits examined a number of key areas, including:

risk management and compliance arrangements

;

supervision of representatives and authorised representatives

;

adequacy of financial resources

;

compensation arrangements

; and

internal dispute resolution procedures

;.

ASIC intends to continue conducting random compliance visits on AFS licensees.

posted at 1:14 PM

New Conflicts Policy

ASIC has issued Policy Statement 181 Licensing: Managing conflicts of interest [PS 181] setting out how it expects financial services licensees to manage their conflicts of interest.

PS 181 is based on the new conflicts management obligation for licensees implemented by the Commonwealth Government's Corporate Law and Economic Reform Program (CLERP 9) legislation. The new obligation takes effect from 1 January 2005.

posted at 12:38 PM

Dollar Disclosure

ASIC has released its policy proposal regarding new dollar disclosure obligations.

Dollar disclosure will be required from 1 January 2005. Under the dollar disclosure provisions, providing entities and product issuers will be obliged to disclose various fees, benefits, costs and interests as amounts in dollars in:

Statements of Advice (SOAs);
Product Disclosure Statements (PDSs); and
periodic statements.

Unless ASIC makes a determination that, for example, dollar disclosure is not possible, fees and benefits must be disclosed as amounts in dollars.

The policy proposal paper sets out how ASIC plans to approach the dollar disclosure provisions together with how it proposes to use its power to make dollar disclosure determinations.

ASIC expects licensees and product issuers to have plans for complying with the dollar disclosure obligations underway. The six-month transition period exists for licensees and product issuers to make any necessary adjustments to their systems, processes and documents so that they can comply with the dollar disclosure obligations. ASIC may consider extending the compliance date for a short period provided industry participants demonstrate they are taking steps to ensure they can comply with the dollar disclosure obligations.

posted at 12:36 PM

Regulation of non-cash payment products

A paper entitled ASIC and the regulation of non-cash payment products was recently presented by Mark Adams, Director, Regulatory Policy,Australia Securities and Investments Commission (ASIC).

The paper deals with cheque accounts, travellers cheques, stored value cards, electronic cash, direct debit services, funds transfer services and electronic bill payment services as well as gift vouchers and loyalty schemes.

posted at 3:11 PM