PDS should reflect PYSP changes: ASIC

ASIC is reminding superannuation funds to update product disclosure statements to disclose exit fees will no longer be charged under the 1 July 2019 changes.

ASIC has amended Class Order 14/1252 to align with the Treasury Laws Amendment (Protecting Your Super Package) Act 2019 and Regulations (PYSP), part of which bans exit fees from July 1.

"We understand that some issuers may have difficulty implementing changes to delete the line about exit fees from their template by 1 July (although it will be blank) and encourage them to make this change as soon as possible," the corporate regulator said.

The amendment made is "technical only" and applies to disclosure concerning superannuation products.

ASIC flagged that its broader review of the fees and costs disclosure regime for superannuation and managed investment schemes (RG97 Disclosing fees and costs in PDSs and periodic statements) is continuing and will not affect the PYSP requirements and amendments to Class Order 14/1252.

ASIC is drafting Consultation Paper 308 in response to regulatory expert Darren McShane's review of RG97, and is currently reviewing submissions.

A number of submissions raised the need to consider PYSP changes to the law, ASIC said, adding it will take PYSP into account in finalising its response to proposals outlined in CP 308.

Some of McShane's recommendations include consolidating and simplifying fee schedules such as investment and indirect costs into one line.

ASIC expects to release a report on its final position in the second half of 2019.

Prudential regulator APRA has warned superannuation funds to do the right thing by members when recovering the costs associated with implementing the PYSP reforms.

"In this regard, APRA would expect that RSE licensees would recover these costs in a manner that is in accordance with its duties to members, whether that is by making changes to fee structures or via (in the short term) the use of an appropriate reserve," APRA said.

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