The Future of Financial Advice reforms to the
Corporations Act 2001 (the Act)
implemented a ban on conflicted remuneration for Australian
financial services licensees and authorised representatives that
will apply from 1 July 2013 (unless the licensee or authorised
representative opts in earlier). However, arrangements entered into
before that 'application date' will be
'grandfathered' with the effect that any benefit given
under such an arrangement, even if given after the application
date, will not constitute conflicted remuneration.
Benefits given by platform operators were initially excluded
from the grandfathering arrangements in section 1528 of the Act.
Platform operators had been lobbying the Government to change this
position before 1 July 2013, given the significant adverse effect
the reforms will have on the existing business arrangements that
many platform operators have with their clients.
Corporations Amendment Regulation 2012 (No. 8), which
was registered on 2 October 2012, extends the operation of the
grandfathering provisions of the Act to platform operators. The
effect of the regulations is to implement the same grandfathering
arrangements for benefits given by a platform operator as are
already in place for benefits given by persons other than platform
operators under section 1528 of the Act. This means that benefits
given by any person, including a platform operator, under any
arrangement entered into before the application day will not be
subject to the ban on conflicted remuneration. All benefits given
under any arrangement entered into on or after the application day
will be subject to the ban.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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This part will cover the legal position in relation to promotional materials and misleading and deceptive conduct.
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