The Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 has been passed by both houses of Parliament and is awaiting Royal Assent.

UPDATE: Royal Assent given on 2 March 2021.

The Bill deals with changes to financial advice regulation which are due to commence on 1 July 2021.

The Bill’s amendments include:

• the Bill repeals and replaces subsection 962G(1) of the Corporations Act so that a fee recipient must give a client a fee disclosure statement no later than 60 days after the anniversary day for the arrangement each year.
• the Bill repeals and replaces subsection 962H(1) of the Corporations Act to require the fee disclosure statement to include information about fees charged for the previous 12 months as well as fees to be charged for the upcoming 12 months.
• the Bill inserts new Subdivision C—Consent required for deduction of ongoing fees from accounts into the Corporations Act. Subdivision C requires a fee recipient to receive express written consent to deduct, arrange to deduct or to accept an amount for payment of fees under an ongoing fee arrangement.
• the Bill inserts paragraph 942B(2)(fa) into the Corporations Act to specify additional matters which are to be included in the Financial Services Guide. The additional requirements arise if the authorised services include the provision of personal advice to retail clients, and the providing entity would contravene subsection 923A(1) by using a restricted word or expression in relation to such provision of personal advice. In that case, the Financial Services Guide must include a statement that states that the providing entity is not independent, impartial or unbiased in relation to the provision of personal advice, and explains the reasons why.
• the Bill inserts proposed section 99FA into the Superannuation Industry (Supervision) Act 1993 so that the trustee of a regulated superannuation fund must not pass on the cost of providing financial product advice to a member of the fund without the consent of the member.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.