17-421MR ASIC updates guidance on conflicted remuneration
ASIC has updated Regulatory Guide 246 (RG 246), now titled Conflicted and other banned remuneration. The conflicted and other banned remuneration provisions were introduced as part of the Future of Financial reforms and this guidance on conflicted remuneration has been updated to include the variety of regulatory changes since its issue in 2013.
The regulatory changes that have impacted on the guidance in RG 246 include:
- the reforms under the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017, which commence on 1 January 2018, mean remuneration arrangements used in some life insurance distribution channels, including direct sales, will need to change.
- amendments to the grandfathering arrangements for the ban on conflicted remuneration.
- the exclusion for basic banking products.
- the stamping fee and brokerage exclusions.
In addition to updating the guidance to reflect regulatory changes, RG 246 now:
- provides additional guidance on the exclusion for benefits paid by the client;
- includes examples of when conference benefits are likely to be conflicted remuneration; and
- reiterates that commissions given by a property developer to an adviser where the adviser recommends the establishment, or use, of an SMSF to purchase property are likely to be conflicted remuneration.
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