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Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012

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7238

2010-2011-2012

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012

 

 

[Amendments (20), (22), (24) and (25) will only be moved if amendment (11) on sheet 7237 for the Corporations Amendment (Future of Financial Advice) Bill 2012 is agreed to.]

(1)     Schedule 1, items 14 and 15, page 4 (lines 14 to 21), omit the items, substitute:

14  Section 960

Insert:

life risk insurance superannuation product has the meaning given by subsection 963B(2).

15  Section 960

Insert:

MySuper product has the meaning given by subsection 963B(3).

[risk insurance]

(2)     Schedule 1, page 4 (after line 21), after item 15, insert:

15A  Section 960

Insert:

personal intra-fund superannuation advice has the meaning given by section 964N.

[intra-fund superannuation advice]

(3)     Schedule 1, item 21, page 5 (lines 18 and 19), omit “a meaning affected by section 964A”, substitute “the meaning given by subsection 964A(2)”.

[volume-based shelf-space fees]

(4)     Schedule 1, item 23, page 7 (line 6), after “identified”, insert “through instructions, so far as is reasonably possible in the circumstances”.

[scalable advice]

(5)     Schedule 1, item 23, page 7 (line 30), omit “circumstances;”, substitute “circumstances.”.

[other steps in best interests of client]

(6)     Schedule 1, item 23, page 7 (lines 31 to 33), omit paragraph 961B(2)(g).

[other steps in best interests of client]

(7)     Schedule 1, item 23, page 9 (lines 15 to 22), section 961E TO BE OPPOSED .

[other steps in best interests of client]

(8)     Schedule 1, item 24, page 16 (after line 10), before paragraph 963B(1)(a), insert:

                    (aa)  the benefit is given to the licensee or representative solely in relation to the provision of general advice;

[general advice]

(9)     Schedule 1, item 24, page 16 (lines 13 to 18), omit paragraph 963B(1)(b), substitute:

                     (b)  the benefit is given to the licensee or representative solely in relation to a life risk insurance product, other than a life risk insurance superannuation product (see subsection (2));

                   (ba)  each of the following is satisfied:

                              (i)  the benefit is given to the licensee or representative solely in relation to a life risk insurance superannuation product;

                             (ii)  the product is not issued to an RSE licensee of a registrable superannuation entity, or a custodian in relation to a registrable superannuation entity, in relation to a MySuper product (see subsection (3));

                            (iii)  the benefit is given by, or on behalf of, a person to whom the licensee or representative provided advice in relation to the life risk insurance superannuation product;

[risk insurance]

(10)   Schedule 1, item 24, page 16 (lines 23 to 26), omit subparagraph 963B(1)(c)(ii), substitute:

                             (ii)  the benefit is not for financial product advice in relation to the product, or products of that class, given to the person as a retail client by that licensee or representative ;

[causal link for advice]

(11)   Schedule 1, item 24, page 16 (after line 32), after paragraph 963B(1)(d), insert:

                   (da)  the benefit is given to the licensee or representative by an authorised representative of the licensee (the purchaser ) in relation to the sale of a financial services business by the licensee to the purchaser;

[sale of financial services business]

(12)   Schedule 1, item 24, page 16 (line 35) to page 17 (line 18), omit subsections 963B(2) and (3), substitute:

             (2)  A life risk insurance product is a life risk insurance superannuation product if the product is issued to an RSE licensee of a registrable superannuation entity, or a custodian in relation to a registrable superannuation entity, for the benefit of a class of members of the entity or for one or more members of the entity.

             (3)  MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993 , as in force on and after the commencement of item 6 of Schedule 1 to the Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 .

[risk insurance]

(13)   Schedule 1, item 24, page 17 (lines 34 and 35), omit “the provision of financial product advice to persons as retail clients”, substitute “carrying on a financial services business”.

[training relevant to carrying on financial services business]

(14)   Schedule 1, item 24, page 17 (line 37), at the end of subparagraph 963C(c)(iii), add “, which must not require the benefit, or the education or training, to be provided in Australia”.

[location of training]

(15)   Schedule 1, item 24, page 18 (lines 4 to 6), omit all the words from and including “in relation to” to the end of subparagraph 963C(d)(ii).

[information technology benefits]

(16)   Schedule 1, item 24, page 18 (after line 14), after paragraph 963C(e), insert:

                    (ea)  the benefit provider is the employer of the licensee or representative;

[benefits to employees]

(17)   Schedule 1, item 24, page 21 (line 21), omit “a financial services licensee or an RSE licensee”, substitute “the responsible entity of a registered scheme, an RSE licensee or the issuer of a managed investment product”.

[meaning of funds manager]

(18)   Schedule 1, item 24, page 22 (lines 11 to 29), omit subsections 964A(2) and (3), substitute:

             (2)  A volume-based shelf-space fee is a monetary product access payment which is not administrative in nature paid by a funds manager to the platform operator.

             (3)  To the extent that the benefit is not a volume-based shelf-space fee, a platform operator may accept an investment management fee scale discount on an amount payable or a rebate of an amount paid to the funds manager.

[volume-based shelf-space fees]

(19)   Schedule 1, item 24, page 25 (after line 7), at the end of Division 5, add:

Subdivision C Fees for personal intra-fund superannuation advice

964J   Application to a financial services licensee acting as an authorised representative

                   If a financial services licensee is acting as an authorised representative of another financial services licensee in relation to the provision of personal intra-fund superannuation advice, this Subdivision applies to the first licensee in relation to the advice in that licensee’s capacity as an authorised representative (rather than in the capacity of licensee).

964K   Financial services licensees must not accept fees for personal intra-fund superannuation advice other than from member to whom advice provided

             (1)  A financial services licensee that is a trustee of a regulated superannuation fund must not accept a fee in relation to the provision of personal intra-fund superannuation advice to a member of the fund, other than from that member.

Note:          This subsection is a civil penalty provision (see section 1317E).

             (2)  A financial services licensee contravenes this subsection if:

                     (a)  the licensee is a trustee of a regulated superannuation fund; and

                     (b)  a representative, other than an authorised representative, of the licensee accepts a fee in relation to the provision of personal intra-fund superannuation advice to a member of the fund, other than from that member; and

                     (c)  the licensee is the, or a, responsible licensee in relation to the contravention.

Note:          This subsection is a civil penalty provision (see section 1317E).

             (3)  The regulations may provide that subsections (1) and (2) do not apply in prescribed circumstances.

964L   Licensee must ensure compliance

                   A financial services licensee that is a trustee of a regulated superannuation fund must take reasonable steps to ensure that representatives of the licensee do not accept a fee in relation to the provision of personal intra-fund superannuation advice to a member of the fund, other than from that member.

Note:          This subsection is a civil penalty provision (see section 1317E).

964M   Authorised representatives must not accept fees for personal intra-fund superannuation advice other than from member to whom advice provided

             (1)  An authorised representative, of a financial services licensee that is a trustee of a regulated superannuation fund, must not accept a fee in relation to the provision of personal intra-fund superannuation advice to a member of the fund, other than from that member.

Note:          This subsection is a civil penalty provision (see section 1317E).

             (2)  The regulations may provide that subsection (1) does not apply in prescribed circumstances.

964N   What is personal intra-fund superannuation advice ?

             (1)  Advice is personal intra-fund superannuation advice if:

                     (a)  the advice is personal advice; and

                     (b)  the advice is provided by a trustee of a regulated superannuation fund, or an authorised representative of the trustee, to a member of the fund as a retail client; and

                     (c)  the trustee holds an Australian financial services licence that covers the provision of personal advice in relation to superannuation products; and

                     (d)  the advice relates to the member’s interest in the fund and does not also relate to:

                              (i)  any other financial product (except eligible insurance (see subsection (2)) in relation to the member’s interest in the fund); or

                             (ii)  anything mentioned in subsection 765A(1) that would be a financial product but for that subsection (except eligible insurance in relation to the member’s interest in the fund); or

                            (iii)  any other matter specified in the regulations for the purposes of this subparagraph; and

                     (e)  the fund is not a self-managed superannuation fund (within the meaning of section 17A of the Superannuation Industry (Supervision) Act 1993 ).

             (2)  For the purposes of subparagraphs (1)(d)(i) and (ii), eligible insurance is insurance of a kind that the trustee maintains in relation to the members of the fund for the purpose of financing benefits to the members that are within the scope of the Superannuation Industry (Supervision) Act 1993 .

964P   Meaning of trustee and member of a regulated superannuation fund

                   The following expressions have the same meaning when used in this Subdivision as they have in the Superannuation Industry (Supervision) Act 1993 :

                     (a)  member ;

                     (b)  regulated superannuation fund ;

                     (c)  trustee .

[intra-fund superannuation advice]

(20)   Schedule 1, item 28, page 26 (lines 7 and 8), omit paragraph (jaah).

[prospective fee disclosure statements]

[Amendment (20) will only be moved if amendment (11) on sheet 7237 for the Corporations Amendment (Future of Financial Advice) Bill 2012 is agreed to.]

(21)   Schedule 1, item 28, page 26 (after line 26), after paragraph (jaap), insert:

               (jaapa)  subsections 964K(1) and (2) (financial services licensee responsible for breach of fees accepted for personal intra-fund superannuation advice);

               (jaapb)  section 964L (financial services licensee to ensure compliance with duty about accepting fees for personal intra-fund superannuation advice);

               (jaapc)  subsection 964M(1) (authorised representative must not accept fee for personal intra-fund superannuation advice other than from relevant member) ;

[intra-fund superannuation advice]

(22)   Schedule 1, item 30, page 27 (lines 12 and 13), omit subparagraph (1E)(b)(v).

[prospective fee disclosure statements]

[Amendment (22) will only be moved if amendment (11) on sheet 7237 for the Corporations Amendment (Future of Financial Advice) Bill 2012 is agreed to.]

(23)   Schedule 1, item 30, page 27 (after line 30), after subparagraph (1E)(b)(xiii), insert:

                        (xiiia)  subsections 964K(1) and (2) (financial services licensee responsible for breach of fees accepted for personal intra-fund superannuation advice);

                        (xiiib)  section 964L (financial services licensee to ensure compliance with duty about accepting fees for personal intra-fund superannuation advice);

                        (xiiic)  subsection 964M(1) (authorised representative must not accept fee for personal intra-fund superannuation advice other than from relevant member);

[intra-fund superannuation advice]

(24)   Schedule 1, item 30, page 27 (line 34), omit “or (v)”.

[prospective fee disclosure statements]

[Amendment (24) will only be moved if amendment (11) on sheet 7237 for the Corporations Amendment (Future of Financial Advice) Bill 2012 is agreed to.]

(25)   Schedule 1, item 30, page 28 (line 3), omit “or (v)”.

[prospective fee disclosure statements]

[Amendment (25) will only be moved if amendment (11) on sheet 7237 for the Corporations Amendment (Future of Financial Advice) Bill 2012 is agreed to.]

(26)   Schedule 1, item 33, page 29 (lines 15 to 18), omit all the words from and including “if:” to the end of subsection 1528(1), substitute “if the benefit is given under an arrangement entered into before the day on which that item commences”.

[grandfathering]

(27)   Schedule 1, item 33, page 29 (line 33) to page 30 (line 1), omit “a financial services licensee, or an RSE licensee”, substitute “the responsible entity of a registered scheme, an RSE licensee or the issuer of a managed investment product”.

[meaning of funds manager]

(28)   Schedule 1, item 33, page 30 (lines 4 and 5), omit “a financial services licensee, or an RSE licensee”, substitute “the responsible entity of a registered scheme, an RSE licensee or the issuer of a managed investment product”.

[meaning of funds manager]

(29)   Schedule 1, item 33, page 30 (after line 28), at the end of Part 10.18, add:

1532   Application of ban on other remuneration—fees for personal intra-fund superannuation advice

             (1)  Subdivision C of Division 5 of Part 7.7A, as inserted by item 24 of Schedule 1 to the amending Act, applies in relation to the provision of personal intra-fund superannuation advice on or after the day on which that item commences (whether or not the advice was sought before that day).

             (2)  Despite subsection (1), that Subdivision does not apply in relation to the provision of personal intra-fund superannuation advice to the extent that the operation of that Subdivision would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph of the Constitution).

[intra-fund superannuation advice]