Market update on ASIC’s CP 216

Industry stakeholders and consumers have voiced their overall support for the Australian Securities and Investments Commission’s Consultation Paper 216, which sets out additional disclosure requirements on advisers to self-managed superannuation funds.

In two separate stakeholder roundtables held by the regulator in October, many participants indicated that they already complied with the new rules being proposed, ASIC commissioner John Price revealed in his speech at the 2013 Institute of Public Accountants National Congress on November 8.

“This is encouraging both in terms of consumer protection and because it means industry is able to implement the proposals with minimal cost and disruption,” he said.

However, Price said one concern that had been raised in the roundtables was whether the proposals signalled plans by ASIC to introduce prescriptive disclosure requirements for advice about other financial products.

“As we said at the roundtable discussions, and I will say it again today, this is not on the cards,” he said.

“Some stakeholders have noted that the proposals cover issues that are also contained in the trustee declaration that SMSF trustees give to the ATO. This isn’t coincidental. ASIC looked closely at the trustee declaration in developing the proposals. A key difference is that trustees get the declaration after they have already set up their SMSF.

“Our proposals are designed to ensure that they get this information before then, so people can use the information to decide whether a SMSF is right for them.”

Price sympathised with financial advisers and accountants who had been grappling with a steady stream of regulatory changes.

ASIC’s eight week consultation period on CP 216 will end at midnight on November 11. A final decision on any further steps will be made by early 2014.