ASIC has released a consultation paper inviting feedback on compensation and insurance arrangements for trustee companies providing traditional services to retail clients.
In consultation paper 139 (CP 139), ASIC proposes to apply its existing policy on administering the compensation requirements contained in RG 126 to trustee companies.
ASIC noted it is particularly interested in feedback from industry on whether the method of calculating the amount of professional indemnity insurance cover contained in RG 126 is appropriate for trustee companies providing traditional services.
ASIC's existing policies and regulatory documents on financial services will generally apply to trustee companies that provide traditional services.
Submissions on the proposal contained in CP 139 close on 18 October 2010.
Under legislation enacted in late 2009, trustee companies providing traditional services are now required to obtain an Australian financial services (AFS) licence.
To assist with the transition, current AFS licensees must vary their licence to cover traditional services by 6 November 2010.
Also, trustee companies that do not already hold an AFS licence must obtain an AFS licence covering traditional services by 1 May 2011.
