There has been some movement regarding the Bill to implement a segment of FOFA Tranche 1 (see Mindmap here) that was introduced into the House of Representatives on 13 October 2011. 

The Bill has been referred to the Parliamentary Joint Committee on Corporations and Financial Services.  The Committee has called for submissions to be received by 25 November 2011 – their reporting date is 29 February 2012.

The Bill, in its current form, focuses on the controversial “opt-in” requirements for charging ongoing fees to clients) and sharpens ASIC’s banning powers.  Other significant elements of the Tranche 1 reforms, such as:

• the introduction of a requirement for advisers to act in the best interests of clients; and 
• a ban on conflicted remuneration, including commissions, volume payments and soft-dollar benefits;

are expected to be implemented through a supplementary Bill.
 
The February 2012 reporting date of the Joint Committee seems to cast doubt on whether the Government can meet its proposed FOFA kick-off date on 1 July 2012.

But, a week is a long time in politics!

For information on Tranche 2 of the FOFA reforms – see our Mindmap here.

We will be keeping a close eye on the deliberations of the Committee and will keep you posted.  

Author: Melanie Sherrin
Partner: Paul Derham 

Future of Financial Advice Timing Update – Doubt Cast on FOFA Starting on 1 July 2012 by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia Licence.

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