ASIC has announced the appointment of Darren McShane will head up the review of newly introduced super fund fee and cost disclosure rules.
Regulatory Guide 97: Disclosing fees and costs in PDSs and periodic statements (RG 97) came into effect on 1 October 2017. In early November ASIC announced that the rules would be reviewed.
“The aim of the this review is to ensure that legislative modifications and regulatory guidance issued by ASIC will best meet in practice the objective of improving fees and costs transparency for consumers,” said ASIC.
ASIC announced Darren McShane would head up the external expert review. Mr McShane has extensive experience in the superannuation industry and managed investments industry, according to ASIC, and was recently Chief Regulation and Policy Officer and Executive Director of the Mandatory Provident Fund Schemes Authority in Hong Kong.
The review will commence in December 2017, and is expected to be completed by the end of the first half of 2018. ASIC says a public report will be released once the review is complete.
“In the meantime, the facilitative compliance approach to fees and costs disclosure will continue,” said ASIC.
“During this time, ASIC expects that funds will endeavour to comply with the current legal requirements in good faith and not mislead consumers about fees and costs. ASIC will continue to monitor disclosure to consumers.”
The appointment of McShane was welcomed by the Australian Institute of Superannuation Trustees (AIST).
“Other jurisdictions have been grappling with the challenges of tackling fee and cost disclosure in financial products, so an international perspective from Mr McShane on what works and what doesn’t will be very useful to the review,” said AIST CEO Eva Scheerlinck.
“There are significant unresolved issues with the current fee and cost disclosure requirements that would benefit from a holistic review, which includes an examination of other policy and legislative settings affecting super funds, ASIC instruments and guidance, and consideration of international best practice,” she said.
AIST will be pushing for more disclosures for the Choice sector.