RG 97: Disclosing Fees and Costs in PDSs and Periodic Statements — ASIC — AU

RG 97 provides guidance on how fees and costs should be disclosed in Product Disclosure Statements (PDSs) and periodic statements.

The information in RG 97 is relevant for issuers of most superannuation products and managed investment products, and operators of notified foreign passport fund products issued to retail clients, which are required to make disclosure in accordance with the enhanced fee disclosure regulations.

The information is also relevant to issuers of investment life insurance products and operators of investor directed portfolio services (IDPSs) and managed discretionary account (MDA) services.

RG 97 was updated following public consultation and an external expert review of the regulatory guide, as well as consumer testing of proposed changes to the presentation of fees and costs. See RG 97 review and consultation and CP 308 .

Following the updates to RG 97 in November 2019 and associated legislative instrument, ASIC has made minor technical amendments to clarify its position on policy issues and amend the PDS transition arrangements (see below).

Modifications to legislative obligations described in RG 97 are made in ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 . This instrument sets out the requirements that apply if an issuer adopts the requirements early or following the end of the transition period, described below.

The transitional version of RG 97
(released March 2017) will continue to be relevant during the transition period. However, the version of RG 97 (released November 2019, reissued September 2020) provides industry with clearer guidance about existing fees and costs disclosure requirements that have not changed from March 2017.

Transition period and 2020 amendments

For PDSs, the new requirements will apply to PDSs given on or after 30 September 2022. Issuers may elect to apply the updated PDS requirements from 30 September 2020.

For periodic statements (ongoing or on exit), the new requirements will apply to periodic statements for a reporting period that commences on or after 1 July 2021. Issuers may elect to apply the updated periodic statement requirements if the periodic statement is for a reporting period that:

periodic statements commencing on or after 1 July 2020, or

ends on a day that is on or after 1 July 2020 if the reporting period ends on the exit date because the holder of the product ceased to hold the product on the exit date.

Minor technical amendments have been made to:

Performance fees:

Clarify in the RG how to disclose performance fees when not charged;

Confirm that the disclosure of the calculated average performance fees for each interposed vehicle in the ‘Additional explanation of fees and costs’ is not required;

Ensure performance fees cannot be included in transaction costs;

Clarify the election arrangements that apply to periodic statements so that the election can only be made by the product issuer;

Confirm there is no change to the treatment of derivative costs;

Significant event notices:

Provide an exemption from the requirement to issue a significant event notice for issuers who merely update the calculation and presentation of their fees and costs to meet the requirements of ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 for the first time;

Provide clarity on SEN requirements where increases in fees arise due to increases in costs;

Reinstate in Class Order [CO 14/1252] that buy-sell spreads do not need to be disclosed in periodic statements for managed investment products (ASIC does not intend to take action for non-compliance for the period between 29 November 2019 to 24 July 2020); and

Make consequential amendments, correct cross referencing errors, incorrect labels and inconsistencies including in the ‘Example of annual fees and costs’ and ‘Consumer advisory warning’.

Note:
We amended ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 and RG 97 in September 2020. The amendment allows issuers of superannuation products to use additional text in the administration fees and costs line item in the ‘Example of annual fees and costs’. We made the amendment to clarify that when the total amount of administration fees and costs includes an amount that applies regardless of the balance, issuers must disclose that amount separately.

Update (11 November 2021)

RG 97: Platform fees and costs disclosure:
ASIC has decided to discontinue work on the RG 97 Platforms project, which focused on platform fees and costs disclosure. This decision takes into account three factors:

First, ASIC has provided guidance about the disclosure of fees and costs for platforms in the updated and current RG 97

Further updating the platform fees and costs disclosure guidance will likely raise policy issues that are a matter for Government, and

Finally, APRA is collecting additional fees and cost data on superannuation products that will feed into publications and become relevant as part of the superannuation annual performance assessment. The new collections include fees and cost data on accessible financial products available on platforms.

Download

Download RG 97
(reissued September 2020)

ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070

For the requirements before the commencement of ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 see:

Transitional version of RG 97 released March 2017; and

Transitional Q&As

Class Order [CO 14/1252]
Technical modifications to Schedule 10 of the Corporations Regulations

ASIC Corporations (Amendment and Repeal) Instrument 2020/579 which amended [CO 14/1252]

Lineage: No known changes