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Tuesday, 24 November 2015
Page: 8724


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (12:44): It is because, in the judgement of the government and this is a position that is supported, I believe, by the opposition in a bipartisan fashion, that is a more appropriate and practically more realistic timetable.

While I am on my feet, I have already flagged in my second reading speech that the government intends to move a series of technical amendments, and Senator Whish-Wilson has already started to debate those amendments, so I seek leave to move together all of the amendments, from (1) to (29) on sheet GU108.

Leave granted.

Senator CORMANN: On behalf of the government, I move amendments (1) to (29) on sheet GU108:

(1) Clause 1, page 1 (lines 15 and 16), omit "Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014", substitute "Corporations Amendment (Financial Advice Measures) Act 2015".

(2) Schedule 1, items 1A to 1J, page 3 (line 4) to page 6 (line 23), to be opposed.

(3) Schedule 1, items 3 to 5, page 7 (lines 1 to 6), to be opposed.

(4) Schedule 1, item 6, page 7 (lines 7 and 8), to be opposed.

(5) Schedule 1, items 7 to 11, page 7 (lines 9 to 21), to be opposed.

(6) Schedule 1, item 12, page 8 (line 13), omit "paragraphs (2)(b), (ba) and (c)", substitute "paragraphs (2)(a), (b) and (c)".

(7) Schedule 1, item 12, page 8 (line 19), omit "paragraphs (2)(b), (ba) and (c)", substitute "paragraphs (2)(a), (b) and (c)".

(8) Schedule 1, items 13 and 14, page 8 (lines 20 to 33), to be opposed.

(9) Schedule 1, item 15, page 9 (lines 3 to 6), to be opposed.

(10) Schedule 1, items 17 to 20, page 9 (line 25) to page 10 (line 5), to be opposed.

(11) Schedule 1, items 21 and 22, page 10 (lines 10 to 13), omit the items, substitute:

21 Subsection 962K(1)

   Omit "30 days", substitute "60 days".

22 Subsection 962S(1)

   Omit "within a period of 30 days", substitute "before the end of a period of 60 days".

(12) Schedule 1, items 24 to 27, page 10 (line 19) to page 11 (line 2), to be opposed.

(13) Schedule 1, item 28, page 11 (lines 5 to 8), omit the example.

(14) Schedule 1, item 29, page 11 (line 20) to page 13 (line 29), omit the item, substitute:

29 At the end of section 963B (after the note)

   Add:

(4) The regulations may prescribe circumstances in which, despite a provision of this section, all or part of a benefit is to be treated as conflicted remuneration.

Note: The expression intrafund advice is often used to describe financial product advice given by a trustee (or an employee of, or another person acting under arrangement with, the trustee) of a regulated superannuation fundto its members, where that advice is not of a kind to which the prohibition in section 99F of the Superannuation Industry (Supervision) Act 1993 applies. (Section 99F of that Act prohibits trustees of regulated superannuation funds from passing on the cost of providing certain kinds of financial product advice in relation to one member of the fund to another.)

(15) Schedule 1, items 30, 31 and 32, page 13 (line 30) to page 14 (line 2), to be opposed.

(16) Schedule 1, item 34, page 14 (lines 7 to 18), omit the item, substitute:

34 Section 963C

   Before "Despite", insert "(1)".

34A At the end of section 963C

   Add:

(2) The regulations may prescribe circumstances in which, despite subsection (1), all or part of a benefit is to be treated as conflicted remuneration.

(17) Schedule 1, item 35, page 15 (line 10), omit "personal advice", substitute "financial product advice".

(18) Schedule 1, item 35, page 15 (lines 15 to 24), omit subsections 963D(3) and (4), substitute:

(3) The regulations may prescribe circumstances in which, despite subsection (2), all or part of a benefit is to be treated as conflicted remuneration.

(19) Schedule 1, items 36, 37 and 38, page 15 (line 25) to page 17 (line 12), to be opposed.

(20) Schedule 1, items 39 and 40, page 17 (lines 13 to 16), to be opposed.

(21) Schedule 1, item 43, page 18 (lines 1 to 3), omit "Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014", substitute "Corporations Amendment (Financial Advice Measures) Act 2015".

(22) Schedule 1, item 43, page 18 (lines 7 and 8), omit "Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014", substitute "Corporations Amendment (Financial Advice Measures) Act 2015".

(23) Schedule 1, item 43, page 18 (lines 9 to 23), section 1531AA to be opposed.

(24) Schedule 1, item 43, page 18 (lines 25 to 27), omit "The amendments made by items 7 to 16 of Schedule 1 to the Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014", substitute "The amendments made by items 12, 14A and 16 of Schedule 1 to the Corporations Amendment (Financial Advice Measures) Act 2015".

(25) Schedule 1, item 43, page 19 (lines 2 to 4), omit "The amendments made by items 17 to 21 and items 39 and 40 of Schedule 1 to the Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014 apply", substitute "The amendment made by item 21 of Schedule 1 to the Corporations Amendment (Financial Advice Measures) Act 2015 applies".

(26) Schedule 1, item 43, page 19 (line 11), omit "for pre-existing clients".

(27) Schedule 1, item 43, page 19 (lines 12 to 14), omit "The amendment made by item 22 of Schedule 1 to the Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014 applies", substitute "The amendments made by items 20A, 20B and 22 of Schedule 1 to the Corporations Amendment (Financial Advice Measures) Act 2015 apply".

(28) Schedule 1, item 43, page 19 (lines 19 and 20), omit "Corporations Amendment (Streamlining of Future of Financial Advice) Act 2014", substitute "Corporations Amendment (Financial Advice Measures) Act 2015".

(29) Schedule 1, item 43, page 19 (lines 24 to 30), section 1531F to be opposed.

These are agreed refinements aimed at improving the operations of FoFA and alleviating a number of unintended consequences that have arisen since the FoFA laws were legislated.

Senator Dastyari and Senator Whish-Wilson would well know that this piece of legislation, the broader FoFA regulatory arrangements, have a long history, particularly in the Senate. Both senators have been in much of that, along the way. As a result of the disallowance of a previous set of FoFA related regulations some further regulations were made, on a bipartisan basis, to deal with some of the necessary improvements, which have bipartisan support.

This bill now enshrines these things as appropriate into legislation. These amendments remove measures in the 2014 bill that do not have broader parliamentary support. These amendments include an extension of the time frame for advisers to send renewal opt-in notices to retail clients and fee-disclosure statements to pre-1 July 2013 clients from 30 to 60 days. The bill already extends the time frame for financial advisers to deliver fee-disclosure statements to their post-1 July 2013 clients. The amendments bring the time frames for providing these documents in line with each other.

During consultation, a number of stakeholders supported the extension of the time frames for fee recipients to provide their statements. I noted that the 30-day time frame was not long enough to properly prepare and quality-assure these documents, particularly as information is usually needed to be sourced from third parties. The extension of the time frame will also be beneficial for consumers in ensuring they receive documentation that contains accurate information.

The amendments also amend the short title of the act—to the bill, at the moment, which hopefully will become the act, to the Corporations Amendment (Financial Advice) Measures Bill 2015. This change is reflective of the fact that the proposed amendments have substantially changed. They are, primarily, minor and technical in nature. The government is committed to ensuring that FoFA operates efficiently and effectively for all consumers and industry participants and, as I indicated in my summing-up speech, we particularly thank Dr Jim Chalmers for his assistance in progressing these bipartisan refinements to FoFA in an efficient manner. With these few words, I commend these amendments to the committee.