ASIC has released policy proposals outlining how it could apply training requirements to financial planners who advise on margin lending and financial resource requirements to licensees who provide margin lending facility products.
Under a consultation paper (CP 108) which looks at the training of financial advisers, ASIC proposed to treat margin lending facilities as Tier 1 products.
Therefore, advisers who advise on margin lending will need to meet the relevant Tier 1 training requirements, including acquiring specialist knowledge set out in an amended version of RG 146 attached to CP 108.
ASIC also proposed that advisers be required to complete the training requirements within 12 months from the commencement date of the new legislation.
Under CP 109, which looks at financial resource requirements, ASIC proposed to amend RG 166 so that a licensee who issues a margin lending facility must hold net tangible assets of 0.5 per cent of the value of the secured property subject to a minimum requirement of $50,000 and a maximum requirement of $5 million.
The consultation papers seek the views of stakeholders, including financial product advisers, training course providers, issuers of margin lending facilities, industry and consumer associations, investors and shareholders and their professional advisers.
Submissions on the proposals contained in the papers close on 10 August 2009.
“We encourage everyone who has an interest in the regulation of margin lending to use this opportunity to provide ASIC with comments on the policy proposals,” ASIC commissioner Peter Boxall said.
“We will also shortly be issuing a consultation paper about dispute resolution requirements for consumer credit, margin lending and trustee companies.
“All comments received in response to these consultation papers will be closely considered and will help to shape the final policy position.”
Additionally, ASIC said the government’s Financial Services Working Group (FSWG) is finalising a new margin lending disclosure regime, including a simplified margin lending product disclosure statement.
“The FSWG will be consulting on the new regime, as well as an example document, later this year,” ASIC said.
