The Assistant Treasurer Bill Shorten has announced transition arrangements to the new Produce Disclosure Regime that will come into effect next year.

 

From 22 June 2012, Product Disclosure Statements for all superannuation products and simple managed investment schemes regulated by the Corporations Act 2001 must be eight pages in length, and meet new content requirements that have been redesigned following consumer testing.

 

Transitional arrangements will apply between 22 June 2011 and 22 July 2012.

 

"The simplified PDS changes complement the Government's Future of Financial Advice reforms, which will improve the quality of financial advice provided to Australian investors," Mr Shorten said.

 

The introduction of shorter Product Disclosure Statements is a key deregulation and consumer protection achievement of the Government.  It cuts down product disclosure documents from over one hundred pages to eight pages, reducing costs for business and providing consumers with high impact disclosure to enable them to make better choices about their money.

 

To provide more time for providers to put processes in place, and flexibility for others who are well advanced, the following changes are being made.  These changes will allow providers of these regulated products:

  • To remain in the old regime until 22 June 2012
  • To continue to issue supplementary PDSs until 22 June 2012
  • To opt into the new regime from 22 June 2011 if they are ready to.

Consistent with the Government's existing policy in relation to shorter disclosure, a number of other changes are also being made, to clarify or refine the operation of the requirements. These refinements include:

  • Changes to confirm that pure risk products are excluded from the regime (irrespective of whether they are provided through a superannuation fund or not)
  • Changes to clarify that combined defined benefit and accumulation products are included in the regime
  • Amending the regulations to allow for situations where applications are electronically lodged.

Draft regulations for these amendments will be available shortly for public comment with the aim of bringing the changes into effect as soon as possible.  Where necessary, providers can approach ASIC for appropriate interim relief.

 

Mr Shorten stated that further changes to apply the shorter disclosure requirements to areas such as platforms and multi-funds are not currently contemplated by the Government.