An investor's guide to the sector and its regulations.
Geraldine Williams has extensive experience as a funds management and financial services law specialist.
With more than 20 years experience in major law firms, Geraldine has spent the last 12 or more years advising participants in the wealth and funds management industry in the structuring, establishment and offering of a range of managed investment products. Her expertise includes fund mergers and terminations; capital raising and stapling involving ASX listed trusts; meetings for member approvals; regulatory and compliance advice and documentation. Geraldine’s specialist financial services expertise includes advising in connection with acquisitions and sales of business involving fund managers and financial services providers.
Geraldine regularly advises and provides documentation in connection with financial services licensing and exemptions; promotion, distribution and disclosure issues for a broad range of financial products and services including derivatives; ASIC relief applications and other dealings. She also advises in relation to the anti-money laundering and counter-terrorism financing regime.
Clients advised by Geraldine include domestic and overseas fund managers and, since being at Minter Ellison, Goldman Sachs & Partners, National Australia Bank, JBWere, AXA, Lazard and Neuberger Berman.
ASIC issued Class Order [CO 13/1621] on 7 January 2014 to exempt responsible entities (REs) from the application form requirements of section 1016A.
On 27 November 2013 ASIC released its updated Information Sheet 155: Complying with requirements for superannuation products and simple managed investment schemes (INFO 155) The updated INFO 155 follows an ASIC industry review of shorter PDSs issued since the commencement of the shorter PDS regime in June 2012 and provides some useful comments as to how ASIC interprets and intends to regulate some of the more technical requirements and lodgement protocols of this regime.
The government has released the draft Terms of Reference for the Financial System Inquiry and announced that it will be headed by David Murray, former CEO of the Commonwealth Bank. The Inquiry has one year to deal with a very large agenda covering all aspects of the Australian financial system.
The new 'hedge fund' definition as set out in ASIC's Class Order 12/749 (as amended from 3 October 2013) is set out below together with some comments in relation to the changes.
On 9 May 2013 the Australian Prudential Regulation Authority released draft Prudential Standard CPS 220 – Risk Management, draft updated Prudential Standard CPS 510 – Governance and accompanying Discussion Paper – Harmonising Cross-Industry Risk Management Requirements, for public consultation. The standards affect ADIs and life and general insurers. APRA has proposed the cross-industry standards as part of its broader harmonisation and consolidation process, which has already seen the implementation of harmonised prudential standards on outsourcing, business continuity management, governance and fitness and propriety. However, in addition to harmonisation, the standards also include significant new risk management governance requirements.
On 26 April 2013 Treasury released the Government response to the Parliamentary Joint Committee on Corporations and Financial Services report on the collapse of Trio Capital and to the Richard St. John report on Compensation arrangements for consumers of financial services. Although preliminary, the response gives a clear signal to industry regarding the shape of future developments in financial services regulation.
The Australian financial services industry is undergoing significant reform aimed at improving the trust and confidence of Australian retail investors in the financial planning sector. The reforms are the Australian Government's response to the Parliamentary Joint Committee on Corporations and Financial Services' Inquiry into financial products and services in Australia.
On 15 February 2013 the New Zealand Financial Markets Authority (NZFMA) announced its review of the Financial Advisers (Australian Licensees) Exemption Notice 2011 (Exemption Notice), due to expire on 30 June 2013 (the Announcement).
The Government has registered the third tranche of the FOFA regulations, with some significant changes. For your information we have summarised the key changes. A copy of the regulations and the explanatory statement is attached.
ASIC has released a new consultation paper in relation to the Future of Financial Advice (FOFA) legislation. This paper focuses on approval of codes of conduct for the exemption to the opt-in requirement for ongoing fee arrangements. Consultation paper 191 (CP 191) invites public feedback with submissions due by 4 December 2012. At the same time, the Financial Planning Association (FPA) has released a consultation paper on changes to its code which in part seek to address the opt-in requirement.
ASIC has released a consultation paper on the conflicted remuneration provisions under the Future of Financial Advice (FOFA) legislation. Consultation Paper 189 (CP 189) invites public feedback with submissions due by 9 November 2012.
The Government has also finally released grandfathering regulations for payments by platforms. It has also indicated that it will not be making the draft grandfathering regulation released in May 2012.
ASIC has revisited the long standing guidance contained in Regulatory Guide 134: Managed investments: Constitutions and released Consultation Paper 188: Managed investments: Constitutions – Updates to RG 134.
Following discussions and consultation with the industry, the Corporations and Markets Advisory Committee (CAMAC) has published its report on Managed Investment Schemes providing recommendations to the Government on various matters concerning the regulation of managed investment schemes under Chapter 5C of the Corporations Act.
This alert outlines some of the key proposals recommended by the CAMAC.
Recently, the Australian Securities and Investments Commission released Report 291: Custodial and Depository services in Australia, which sets out ASIC's views on 'good practice' for responsible entities, platform operators, brokers and custodians on a range of issues relevant to custody of assets. It also signals other matters that ASIC intends to consult on with a view to updating its current guidance. Shortly prior to the release of ASIC's Report, the European Commission released its proposal for amending Directive 2009/65/EC on the remuneration policies of management companies and depositary functions relevant to undertakings for collective investment in transferable securities We summarise the issues and proposals raised in ASIC's Report and the EC's proposal in this update.
ASIC has issued guidance to assist issuers of superannuation products and simple managed investment schemes comply with the shorter product disclosure statement (PDS) regime. The shorter PDS regime commences fully on 22 June 2012 and is designed to make PDSs shorter and simpler, and help consumers compare financial products more easily. Issuers of new products have been required to comply with the regime since 22 June 2011 and other product issuers have been able to voluntarily opt-in.
The Australian Government has released draft regulations under the yet-to-be-passed Future of Financial Advice (FOFA) legislation. The regulations have been released in two tranches, and cover:
The report by Mr Richard St John into compensation arrangements for consumers of financial services, released on 8 May 2012, has recommended the consideration of key reforms which could have a significant impact on the financial sector. We analyse the report and discuss its key recommendations and their implications for licensees, product issuers and consumers.
The Parliamentary Joint Committee on Corporations and Financial Services (PJC) released its report on the Future of Financial Advice (FOFA) on 29 February 2012 confirming that the 'vast majority' of FOFA provisions should commence on 1 July 2012. The PJC does, however, embrace ASIC's proposal to adopt a facilitative approach to enforcement during the first 12 months, but only where breaches are inadvertent and the result of systems issues. It also embraced the view that ASIC adopt a facilitative approach to enforcement during the first 12 months, demonstrating a measure of accommodation to industry participants where breaches are inadvertent and the result of systems issues. We discuss the key PJC recommendations and summarise the Coalition recommendations in this Alert.
On 13 October 2011, The Australian Government tabled part of the first tranche of the Future of Financial Advice (FOFA) legislation in the House of Representatives. A number of changes have been made to the Exposure Draft which was released on 29 August 2011, including the removal of the best interests duty provisions. A further draft of these provisions is expected to be released for public consultation in the near future.
On Wednesday 28 September, the federal government released the second tranche of draft legislation (including an Explanatory Memorandum) designed to give effect to its Future of Financial Advice (FOFA) reforms. The draft Bill addresses conflicted remuneration (including product commissions, volume payments and 'soft dollar' payments). Surprisingly, long-awaited provisions dealing with the 'grandfathering' of existing commission arrangements have been left out of the draft legislation. In this Alert, we will briefly consider the main provisions of the draft Bill, and what their impact is likely to be. The deadline for submissions to Treasury on the draft Bill is 19 October 2011.
In this commentary piece for The Age, partner Carolyn Reynolds and special counsel Geraldine Williams discuss the implications for the agricultural MIS sector of the Australian Securities and Investments Commission 's proposed new disclosure regime against key benchmarks.