ASIC has today issued a media release regarding the deferral of the deadline for implementing ASIC’s fees and costs disclosure requirements in product disclosure statements from 1 February 2017 to 1 October 2017.
ASIC will be formalising this announcement by releasing an amended ASIC Class Order 14/1252 shortly. The terms of the amended instrument will be important because there are aspects of the media release that may be problematic.
To rely on the revised deadline, a product issuer must meet certain conditions. According to ASIC’s media release, the conditions are:
· ASIC must be notified that the product issuer wants to take advantage of the extension in relation to a PDS. This must be done in writing to firstname.lastname@example.org, by 31 January 2017.
· ASIC must be given information about the fees and costs that would be required to be included in the PDS had the product issuer complied with ASIC’s instrument. This must be done before 1 March 2017. ASIC will be publishing instructions and forms for product issuers to use for this purpose.
ASIC indicates it will be looking at the information provided to it by product issuers to determine if reasonable steps are not being taken towards compliance with the ASIC instrument, and enforcement action might be taken in relation to ‘likely non-compliance’. ASIC also indicates that it may publish the information it receives (although not in a manner that would identify the issuer of each product).
The deadline for implementing revised fees and costs disclosures in periodic statements is not changing.
Importantly ASIC notes that adherence to prohibitions on false, misleading and deceptive conduct are unaffected by this announcement. While this is stating the obvious, it does pose some challenges given, on the one hand, a product issuer must be able to notify ASIC about fees and costs that would otherwise be included in the PDS before 1 March 2017 (to take advantage of the revised deadline) while, on the other hand, withholding that information from PDSs until the end of September 2017. Omitting known information may result in misleading or deceptive conduct.
Hopefully, the amended ASIC Class Order and/or instructions to be provided by ASIC will provide some more clarity.