When do the DBFO changes come into force?

On Thursday, ASIC announced that following the Treasury Laws Amendments (Delivering Better Financial Outcomes and Other Measures) Act 2024 receiving royal assent on Tuesday, it has begun outlining the obligations for advisers to comply with the act.

"Industry should be aware of the reforms, including transitional periods if applicable, and have, or be in the process of updating, systems and processes as required," ASIC said in a statement.

The regulator has prioritised issuing new documentation for the measure that will commence first – the new rules around financial services guides (FSGs).

Schedule 1, Part 3 of the DBFO Act permits financial product advice providers to either continue providing an FSG or make the FSG information publicly available on their website. Unlike most other measures, this provision commenced the day after royal assent.

In its statement on Thursday, ASIC announced it had registered ASIC Corporations (Amendment) Instrument 2024/554, which modifies existing ASIC instruments in response to the amendments to FSGs introduced by the DBFO Act.

It has also amended licence condition 52 in the Pro Forma 209 Australian financial services licensee conditions (PF 209) so that new AFSLs will need to meet record-keeping obligations regarding website disclosure information, consistent with the record-keeping obligations in PF 209 for FSGs.

“This ensures technological and format neutrality in FSG record-keeping obligations,” ASIC said.

The regulator said it also intends to issue a new Information Sheet on FSGs and the new website disclosure information, which will replace the guidance on FSGs in Section C of Regulatory Guide 175.

Among the most eagerly awaited changes from the DBFO Act is the removal of fee disclosure statements (FDSs), which is included in Schedule 1, Part 2 of the act.

This also introduces flexibility in anniversary date timing for ongoing fee arrangements (OFAs), amends the mandatory content for ongoing fee consents, and replaces ASIC’s ability to prescribe this content with ministerial ability.

In the somewhat unwieldy language of legislation, these measures will commence “six months after the day after royal assent” for new OFAs. Since the act received royal assent on 9 July 2024, the start date is 10 January 2025.

“Transitional arrangements apply to existing OFAs at the start day so that current requirements may apply for up to 150 days after the ‘transition day’, which is the anniversary of the day the OFA was entered into that occurs after the start day,” the regulator added.

ASIC said it intends to issue new guidance on ongoing fee arrangements and consents to deduct fees or costs under non-ongoing fee arrangements by November 2024.

No guidance for funds yet

With the stoush over section 99FA of the Superannuation Industry (Supervision) Act being resolved largely in favour of codifying the status quo, ASIC did not provide any information on whether it intends to update its guidance for super fund trustees or advisers on the deduction of advice fees.

The changes that remained in the act, which are designed to clarify the legal basis for super trustees charging a member’s advice fees to their super and associated tax consequences, are also set to commence in six months.

“Transitional arrangements of up to 12 months apply to existing non-ongoing fee arrangements at this time,” ASIC said.

The regulator added that it would update Regulatory Guide 246, which covers conflicted and other banned remuneration, to reflect changes in the conflicted remuneration obligations and will make “consequential amendments” to other guidance.