Speaking to InvestorDaily, Minter Ellison partner Richard Batten said the bill tabled this week revealed the government had decided not to go ahead with two changes.
First, the removal of the FDS requirement for existing clients has not been made retrospective; and second, wholesale platforms have not been excluded from the ban on volume-based shelf-space fees, he said.
In relation to the first matter, Mr Batten said the FDS requirement will now apply to all existing clients from 1 July 2013 – rather than from the date the amendments to FOFA are eventually made law.
This is contrary to indications by the government in its earlier FOFA draft amendments, he said.
As a result, there will be a 'gap' between 1 July 2013 and the date the changes become law during which FDSs must be delivered to existing clients on their 'anniversary' date, he said.
"The problem is there are [licensees] out there who have been expecting this repeal of the obligation to do an FDS for existing clients and who may not therefore have complied with the obligation in the expectation of that change," said Mr Batten.
"They will still have breached the law between 1 July 2013 and the day the bill commences," he said.
While ASIC took a 'no action' position for the first six months of the FDS regime and has announced its 'facilitative' approach to enforcement for the first year of FOFA, that doesn't mean clients won't take action against advice firms, said Mr Batten.
"Clients can still potentially try and seek some form of civil liability. I don’t know if they’re going to be able to establish loss to get that though – but there's still the potential there," he said.
"There uncertainty, there’s risk, and that creates cost. Risk always creates costs, even if it’s 'Do we have to do anything?'" said Mr Batten.
It would have "made sense" to make the repeal of the FDS requirement for existing clients retrospective to 1 July 2013, he said.
"The government has said they don’t want this obligation to apply in respect of existing clients – why should the residual risk and liability rest with licensees? It doesn’t make sense," said Mr Batten.
