King & Wood Mallesons

Asia-Pacific 100 position: 3

Commencement of FOFA bans on 1 July 2013

The bans on conflicted remuneration, volume-based shelf space fees and asset-based fees on borrowed amounts commence on 1 July 2013, together with the statutory duties for financial advisers and new ongoing advice fee rules.

The anti-avoidance provisions commenced a year ago. While benefits provided under existing arrangements on 30 June 2013 might be able to continue to be paid under grandfathering rules, benefits provided under arrangements entered into from 1 July 2013 must comply.

However, notwithstanding a long lead time, what is banned, what is not banned and what is grandfathered is not only poorly understood, but uncertain…

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