ASIC issues further updated fees and costs disclosure guide

ASIC has issued a further updated guide for issuers of superannuation and managed investment products to help them comply with the Corporations Amendment Regulations 2005 (No. 1) (the enhanced fee disclosure regulations).

The revised Enhanced fee disclosure regulations: Questions and Answers – an ASIC Guide answers commonly asked questions about compliance with the regulations.

The enhanced fee disclosure regulations include measures on the disclosure of transactions and fees and costs in product disclosure statements (PDSs). These provisions require PDSs for certain investment-linked financial products to include:

• a standardised fee template (with accompanying explanation);
• an example of annual fees and costs for a balanced or similar fund; and
• a boxed consumer advisory warning.

The regulations applied to PDSs for superannuation products from1 July 2005 and for other financial products, including managed investment products, from 1 July 2006. The regulations also mandate certain transactional disclosures in periodic statements of product issuers of superannuation products (from 1 July 2006) and of managed investment products (from 1 July 2007).

On 26 March 2007, Treasury released for comment draft Corporations Amendment Regulations that proposed extending the enhanced fee disclosure regime to investment life insurance policies. A date for the commencement of the regulations is yet to be announced.