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Issue 593, 23 February 2016 

In this issue: 

 

Electronic disclosure: refinements to ASIC relief 

ASIC has refined the relief issued last year to facilitate the delivery of financial services disclosure materials electronically. 

As outlined in ASFA Action issue 577, ASIC issued Regulatory Guide 221 Facilitating digital financial services disclosure in July 2015, along with two new legislative instruments. 

In particular, Instrument 2015/647 enabled a provider to make financial service disclosures electronically to investors, provided it had first sent a notice to the investor of its intention to do so, and the investor had not opted out within seven days of receiving disclosures electronically. 

ASIC has now issued ASIC Corporations (Amendment) Instrument 2016/103, which amends Instrument 2015/647 by: 

  1. simplifying the disclosure notification involved in the ‘publish and notify’ method of disclosure where the provider does not intend to issue a disclosure within the first seven days 
  1. enabling default superannuation fund trustees to use the ‘publish and notify’ method of disclosure, using an employer provided electronic address, in relation to a number of specific prescribed disclosures. These include product disclosure statements, periodic statements, annual fund information, disclosures about material changes and significant events, and disclosures to former holders of a superannuation product 
  1. ensuring that successor funds can use an employer provided email address that was provided to a predecessor fund. 

The amendments commenced on 19 February 2016. 

 

Selecting a default fund: ASIC guidance to employers 

ASIC has updated its MoneySmart website to provide new guidance to employers about selecting a default superannuation fund for employees. 

The updated information encourages employers to consider a range of factors when deciding about a default fund for employees, including fees, investment options offered, fund performance and insurance. 

ASIC Commissioner, Greg Tanzer, said ASIC is also encouraging employers to be very wary of trustees offering them inducements to pick their funds. “Employers should not choose a default fund on the basis of an inducement. I strongly encourage employers who are concerned they may have been offered an inducement that is illegal to contact ASIC”. 

The guidance follows a review of some retail and industry super trustees to assess their compliance with s68A of the Superannuation Industry (Supervision) Act 1993. Section 68A prohibits a trustee from engaging in certain conduct in relation to fund membership, including giving or offering to an employer an inducement on the condition that one or more of their employees becomes a member of the fund. 

ASIC has indicated that it will continue to monitor the area of employer inducements and may consider undertaking shadow shopping exercises to gain a better understanding of the employer experience when dealing with superannuation trustees and their associated businesses. 

 

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