The latest legislative change prompting discussion is the Financial Services Reform Bill 2001 (FSRB) which is at present before the Federal Parliament. Now that the new federal Corporations Act 2001 has come into force, as of July 15 2001, the way has been paved for the FSRB to commence on October 1 2001.
The FSRB deals with changes to the regulation of the financial services sector. In brief, the FSRB proposes three key reforms:
- a harmonized single licensing, disclosure and conduct framework for all financial service providers;
- a consistent and comparable framework for financial product disclosure; and
- a streamlined regulatory regime for financial markets and clearing and settlement facilities.
The FSRB will amend the Corporations Act and its provisions will be included in Part 7 of the Bill. The FSRB will have far-reaching effect on a number of industries including retail banking, insurance (life and general), fund management, brokers (including futures and derivatives), superannuation, investment advisers and dealers, market and exchange operators and clearing and settlement facilities.
Also of interest are the long awaited transitional provisions that set out how affected entities will transform their existing businesses to comply with the FSRB. The transition period is proposed to begin on October 1 2001 for a period of two years for the phasing in of compliance with licensing and disclosure requirements. It should be noted, however, that other provisions of the proposed FSRB, such as the market misconduct provisions and certain product disclosure provisions would apply immediately.
Kathy Dal Molin