Responsible entities and superannuation trustees have until 1 February, 2017 to comply with new disclosure rules concerning fees and costs, says Henry Davis York.
Fund managers and superannuation funds that fail to update their product disclosure statements (PDSs) by 1 February, 2017 will be risking ASIC enforcement action, says commercial law firm Henry Davis York.
In an update to clients, Henry Davis York explained that updates to ASIC Schedule 10 and Regulatory Guide 97 mean that PDSs will be required to include all of the transactional costs for managed funds (i.e. not limited to the costs that are recovered by the charging of the buy-sell spread).
"This will mean indicating to what extent those transactional costs are borne in any buy-sell spread charged to investors being issued or redeeming interests and to what extent it is borne by the fund," said Henry Davis York.
"In practice, this means PDSs will need to separately state those transactional costs associated with day-to-day trading in the format prescribed by clause 209(j) of Schedule 10."
As a result, responsible entities and superannuation trustees will have to consider all of their day-to-day trading costs – as well as 'implicit' costs embedded in bid-offer spreads, said Henry Davis York.
"We are now seeing managers develop policies and procedures to capture house views on these calculation issues and also to document the steps taken to meet the requirements from a compliance perspective," said the update.
"Given the timing for the deadline and the practical difficulties with managers' and trustees' key personnel and due diligence committees organising reviews and sign off over the Christmas and January holiday period, we are now seeing many managers schedule PDS rolls for RG 97 compliance for before the end of 2016."
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