The Financial Services Council has welcomed government clarification of the application of the Shorter Product Disclosure Statement (SPDS) regime to superannuation platforms and multi-funds.
In late December, the Minister for Financial Services and Superannuation, Bill Shorten, provided clarity to providers of superannuation platforms and multifunds on the new regulations.
The SPDS regime is set to start on 22 June 2012 with the lofty goal of ensuring that disclosure for certain financial products – including superannuation and simple managed investment schemes – is presented in a short and simple way that equips consumers to make better financial decisions.
“We welcome the flexibility provided by the interim position whereby superannuation platforms and multi-funds will be excluded from the Shorter PDS regime,” says Martin Codina, director of policy at the Financial Services Council.
“The announcement also confirms that, at the provider’s election and subject to ASIC relief, these offerings can be made under the Shorter PDS regime instead of the current regime.
“These changes will benefit consumers by ensuring they continue to receive the most appropriate and effective disclosure in relation to these offerings.
“The Financial Services Council supports short and simple disclosure that assists consumers to make better financial decisions and we have worked with the Government to ensure transition to the new regime occurs without unintended consequences.”
Minister Shorten said government was aware that the financial services industry is dealing with a number of implementation issues in moving to the new SPDS regulations for superannuation platforms and multifunds.
He added that government would undertake further consultation with industry and consumer groups to determine whether these products should be completely out of the shorter PDS regime or in the regime but with modified content requirements.
On an interim basis superannuation platforms will be excluded from the SPDS regime, however relief will be provided by ASIC so that superannuation platforms can, on the discretion of the provider, be included in the SPDS regime.
Multifunds will also be excluded from the SPDS regime, but relief will also be provided so that multifunds can, at the discretion of the provider, be included in the SPDS regime.
Finally, the government reiterated that other complex products such as hedge funds would continue to remain excluded from the SPDS regime, in accordance with the original policy intent.
“We need to keep in mind that while the shorter disclosure documents work well for relatively simple financial products, complex products often have features and risks that can’t be addressed in a short and simple manner,” says Shorten.
