Chris Bowen, Minister for Financial Services, Superannuation and Corporate Law, has announced regulations to support the new margin loan regulatory regime.
Margin loans became a financial product under the Corporation Act in 2009, ensuring that the investor protection contained in it will also apply to margin loans.
How does this affect me?
If you provide margin loans you:
- Must be licensed by ASIC; you have until 30 June to apply to ASIC, otherwise you must cease providing the service
- Must meet new responsible lending requirements; only providing advice that is appropriate to a client’s individual circumstances
- Must provide a Product Disclosure Statement (PDS) that meets the length, size and content proscribed by the regulations
- May combine certain disclosure documents, such as the Financial Services Guide (FSG) and Credit Guides; saving costs for the provider, and simplifying disclosure for the client
When does this apply?
The regulations come into force at the same time as the general margin loan provisions in the Corporations Act, on 1 January 2011.
What can we do for you?
Certainty Compliance can consult with you and ensure that you are adequately licenced to provide margin loans. Please contact us on (02) 8324 5300 or email enquiries@certaintycompliance.com.au for further information.
For further information:
Minister’s media release: : http://mfsscl.treasurer.gov.au
ASIC’s margin lending overview: www.asic.gov.au/marginlending