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July 24, 2012

More FOFA Regulations: Corporations Amendment Regulation 2012 (No. 4)

The Corporations Amendment Regulation 2012 (No. 4) have been registered.

The amendments to the Corporations Regulations:

  • exclude product fees from the definition of an ‘ongoing fee arrangement’;
  • delay the application date to 1 July 2013 for the ban on conflicted remuneration with respect to benefits that relate to group life risk insurance inside superannuation funds and all life risk insurance policies in default superannuation funds;
  • exclude benefits given for advice relating to interests in time-sharing schemes from the ban on conflicted remuneration;
  • provide further detail of the scope of the exemptions from the ban on conflicted remuneration for certain non-monetary (‘soft-dollar’) benefits and introduce record keeping requirements in relation to those benefits.

The timeshare exemption from the ban on conflicted remuneration for financial advice is in recognition of its lifestyle features rather than being an investment product. The exemption allows the industry to continue to remunerate its employees through sales-based commissions.

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Posted 24th July 2012 by David Jacobson in Corporations Act, Future of Financial Advice Reforms