BREAKING: Sinodinos announces FOFA consultation

by |
Treasury has just announced it has opened FOFA amendments for public consultation over the next three weeks.

Assistant Treasurer Arthur Sinodinos said today the Government has released the draft regulations and legislation for its proposed reforms to the public to discuss.

"Delivering on the Coalition's election commitment, the Government has today released draft legislation and regulations to reduce compliance costs and remove red tape on the financial services industry," said Sinodinos.

"The Government is supportive of the principles of FOFA, but the previous Government's reforms are unwieldy, burdensome and unnecessarily complex. The proposed reforms will reduce the burden on industry and pressures on the cost of advice to consumers.”

Consistent with the Government's announcement on 20 December last year, key amendments include:
  • removing the opt-in requirement
  • streamlining the annual fee disclosure requirements;
  • amending the best interests duty to allow for scaled advice;
  • exempting general advice from conflicted remuneration; and
  • amending grandfathering to allow for adviser movements.
The draft legislative amendments and draft regulations are available at the FOFA website.
To try to get the law in place for the financial services industry as fast as possible, the Government will put in “time sensitive measures” through regulations to the extent legally possible, with amendments to be subsequently made in the primary legislation, Treasury said.

The interim regulations – those made redundant by the passing of the legislative amendments – will be repealed once the legislative amendments have been passed, while amendments best addressed via regulations will remain in place.

The consultation process will be open for three weeks, with submissions closing on 19 February.

Following the consultation process, the Government predicts regulations will be made at the end of March 2014 and a Bill will be introduced into Parliament in the 2014 autumn sitting period to be passed into law during the winter sitting period.