Wednesday 20 June 2007 LAWFUEL – Australia & New Zealand Legal News – The Australian Securities and Investments Commission (ASIC) has invited public comment on its proposals about the regulation of investor directed portfolio services (IDPS). The proposals will be relevant to all operators of IDPS and IDPS-like registered schemes and to advisers who recommend IDPS to clients.
Also included are a set of proposals relevant to trustees of superannuation funds about the delivery of product disclosure. Our proposals aim to: • reduce complexity, barriers to entry and regulatory burden by removing regulation of IDPS operators beyond that applying to licensees performing dealing or custodial or depository services that do not involve an IDPS, where appropriate; • adopt a more principles-based approach to the regulation of IDPS and IDPS-like schemes consistent with Chapter 7; • treat the operation of IDPS and IDPS-like schemes similarly where there is no basis for different treatment; and • maintain adequate consumer protection by ensuring good advice about using an IDPS, adequate disclosure about the IDPS and securities and financial products accessible via the IDPS, reliable client reporting, effective compliance controls and custodial and transactional integrity.
In April 2006, the Parliamentary Secretary to the Treasurer published a Corporations and Financial Services Regulation Review Consultation Paper. One of the items in the paper sought comment on the need for a review of policy about IDPS. Following public comment suggesting some changes to regulation of IDPS, the Parliamentary Secretary asked ASIC to consider the matter. This is the first time since its issue that ASIC has undertaken a broad policy review of Policy Statement 148: Investor directed portfolio services [PS 148]. This review is being undertaken in light of the reforms in the Financial Services Reform Act (2001), technological developments and expansion in the IDPS industry. The proposals take into account submissions to the PST, our regulatory experience with IDPS and some preliminary industry consultation. ASIC will also be amending Class Order [CO 02/294] Investor directed portfolio services and Class Order [CO 02/296] Investor directed portfolio-like services provided through a registered managed investment scheme to clarify what the report of an auditor concerning continuous electronic access must contain.
The consultation paper entitled Review of Policy Statement 148: Investor directed portfolio services is available from the ASIC website at www.asic.gov.au or by calling the ASIC Infoline on 1300 300 630. Submissions about the proposals should be emailed to [email protected] The closing date for submissions is 4 September 2007. Background IDPS are administration services that facilitate the acquisition and holding of assets by enabling investors to bundle or ‘wrap’ a number of services including custody of assets, execution and consolidated reporting. IDPS operate through a technology interface and usually, but not always, through a financial adviser. A key feature of an IDPS is that the client makes all the investment decisions. A wide variety of investments can be accessed via an IDPS. These often include wholesale funds that would not otherwise be available to retail clients. Where these services are provided as a registered scheme, they are classified by [PS 148] as IDPS-like schemes.
For further information contact: Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769