The Parliamentary Joint Committee on Corporations and Financial Services has commenced an inquiry into the wholesale investor test and the wholesale client test for financial products and services.

The inquiry is separate to the Managed Investment Scheme review underway with Treasury which includes the wholesale investor and client test in its scope.

The terms of reference for the review include:

  • A review of the current wholesale investor/client tests, including legal requirements, identification of all contexts in which the tests are relevant, the consequences of an investor/client meeting the relevant test, and the application of the tests in practice;
  • The historical development in Australia of the wholesale investor/client tests and consideration of any previous reviews and inquiries;
  • Comparison with comparable overseas jurisdictions, including any proposed or recent changes to tests used in similar contexts;
  • Consideration of any proposals to change the wholesale investor/client tests, including: any evidence to support such proposals, the possible consequences (both intended and unintended) of any change to the wholesale investor/client tests, the costs and benefits of any change, the impact of any change on different cohorts of investor/client and other stakeholders;
  • Any potential adjustments to proposals to change the wholesale investor/client tests to address the concerns of stakeholders;
  • The process to be adopted prior to settling any change to the wholesale investor/client tests, including any additional Government consultation process necessary to ensure full and proper consultation prior to implementing any change; and
  • Any related matters.

Submissions close on 15 May 2024.