Licensing and disclosure: Making the transition to the FSR regime

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Example A LICENSING AND DISCLOSURE: MAKING THE TRANSITION TO THE FSR REGIME SECTION 2.1: PRODUCT DISCLOSURE — WHAT IS THE TRANSITION PERIOD? Before 11 March 2002, A is a life insurer who issues life risk insurance products. After that date, A wishes to issue a new offer document which refers to those life risk insurance products which it has offered to issue before 11 March 2002. The transition period for those products will begin on 11 March 2002 and end when A opts in to the new regulatory regime, or after 2 years, whichever occurs first. During the transition period for those products, A may issue an offer document under its old product disclosure regime. If A wishes to issue the offer document for a product under the new regulatory regime, it can opt into the new regulatory regime in relation to that product: see Section 2.3 of this guide. After 11 March 2002, A wishes to offer superannuation interests for the first time. There is no transition period for those products, so Part 7.9 will apply in respect of those products and A must prepare a product disclosure statement (PDS) under the new regulatory regime. Example B Product issuer A issues financial products before 11 March 2002. A is part of a group of companies that re-structures its operations, so that after 11 March 2002, B, a related entity that came into existence after FSR commencement, carries on A’s former business of issuing life insurance investment products. Under the transitional provisions, B will have no transition period, as it will be offering to issue life insurance investment products for the first time on or after 11 March 2002: see s1438(1). Some Part 7.9 obligations apply from FSR commencement on 11 March 2002 2.1.5 However, some obligations under Part 7.9 of the FSR Act will apply to all financial products, whether new or existing, from 11 March 2002: see s1438(2) of the transitional provisions. These are: (a) s1017C (information for existing holders of superannuation products and RSA products); (b) s1017DA (regulations made under that section may specify additional obligations on trustees of superannuation entities to provide information); (c) s1017E (dealing with money received for financial products before the product is issued); (d) s1017F (confirming transactions); Australian Securities and Investments Commission — October 2001 Page 50
LICENSING AND DISCLOSURE: MAKING THE TRANSITION TO THE FSR REGIME SECTION 2.1: PRODUCT DISCLOSURE — WHAT IS THE TRANSITION PERIOD? (e) s1019A and 1019B (cooling-off period for return of financial product); (d) s1020B and 1020C (short selling of securities, managed investment products and certain other financial products); and (e) s1020D (Part 7.9 cannot be contracted out of). Note 1: By proclamation under s1442B of the transitional provisions, 11 March 2002 was fixed as the date for the purposes of that section, so that the obligations in s1017F (confirming transactions) and s1019A and 1019B (cooling-off period for return of financial product) will commence on 11 March 2002. Note 2: You will need to refer to relevant regulations that apply for the purposes of Part 7.9 obligations, including regulations that modify the effect of Part 7.9 provisions. A product issuer may have more than one transition period 2.1.6 A product issuer may have different transition periods for different products. Example Product issuer A issues products 1 and 2 before 11 March 2002. For products 1 and 2, A decides to opt into the new product disclosure regime 12 months later, by lodging a notice with ASIC that states A intends new Part 7.9 to apply to products 1 and 2 from 11 March 2003: see Section 2.3 of this guide for guidance on the opt-in mechanism) A plans to issue a product in a new class of products, product 3, for the first time on 11 September 2002, 6 months after FSR commencement. A will have a 12 month transition period for products 1 and 2, and no transition period for product 3. A will be subject to the obligations in 2.1.3 from 11 March 2002 in relation to products 1 and 2, and it will also be subject to those obligations at all times in relation to product 3. 2.1.7 Product issuers will need to plan their transition to the new regulatory regime with care, to ensure that they and other relevant persons can comply with all the requirements that will apply to them during and after the transition period: see Section 2.2 of this guide. Australian Securities and Investments Commission — October 2001 Page 51
Page 1 and 2: CONSULTATION PAPER 26 Licensing and
Page 3 and 4: Contents LICENSING AND DISCLOSURE:
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Page 7 and 8: Product disclosure LICENSING AND DI
Page 9 and 10: Your comments LICENSING AND DISCLOS
Page 13 and 14: Our message: apply early LICENSING
Page 15 and 16: Example A LICENSING AND DISCLOSURE:
Page 21 and 22: New financial service providers REP
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Page 63 and 64: Related papers LICENSING AND DISCLO
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Licensing and disclosure: Making the transition to the FSR regime

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