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Thursday, 8 February 2007
Page: 8


Mr Laurie Ferguson asked the Treasurer (Costello), in writing, on 10 October 2006:

(1)   What is the Government’s response to the ongoing expansion of Mutual Discretionary Funds (MDFs).

(2)   Does the Government have any proposals for regulating MDFs.

(3)   Are Australian consumers able to make complaints against the operation of a MDF; if so, how many complaints or incidences of litigation have there been against MDFs.


Mr Dutton (Minister for Revenue and Assistant Treasurer) —The Treasurer has referred this question to me as it falls within my ministerial responsibilities. The answer to the honourable member’s question is as follows:

(1)   The Government has no comprehensive data on whether or not there has been an expansion of Discretionary Mutual Funds (DMFs).

(2)   The Government is considering proposals for regulating DMFs.

(3)   DMFs that carry on a financial services business in this jurisdiction must hold an Australian financial services licence covering the provision of the financial service. All Australian financial services licensees, who provide financial services to persons as retail client, are required to have internal dispute resolution mechanisms and also be a member of an ASIC approved external dispute resolution scheme or schemes. In relation to complaints made against DMFs, specific data it is not available. Data collected reflects the nature of a complaint in relation to a product, rather than the structure of the product provider.