The shorter PDS regime commenced in June 2012.
Recently, ASIC has reviewed a sample of shorter PDS for superannuation and simple managed investment schemes in order to gauge how well PDS issuers were complying with the new regime and identify any measures needed to increase compliance.
ASIC found issuers had made a good effort to comply and any non-compliance tended to be technical rather than substantive.
“Some issuers have responded imaginatively to the requirements of the new regime to educate consumers, for example, about how superannuation works and the relationship between risk, return and investment time horizons. We are pleased to see initiatives that seek to improve consumer understanding,” ASIC commissioner Greg Tanzer said.
Information Sheet 155
On 27 November 2013, ASIC released its updated Information Sheet 155: Complying with requirements for superannuation products and simple managed investment schemes (INFO 155).
The updated INFO 155 provides some useful comments as to how ASIC interprets and intends to regulate some of the more technical requirements and lodgement protocols of this regime. Areas of concern for ASIC included:
SUPPLEMENTARY PDSs and SHORTER PDSs
The use of supplementary PDSs to update shorter PDSs are prohibited under regulations 7.9.11M and 7.9.11U.
In this regard, ASIC has provided further guidance for issuers that are looking to amend a shorter PDS:
If a product feature has a benefit and a cost and the PDS refers only to the benefit, ASIC said the PDS may be misleading unless it also refers to the cost of that benefit.
Finally, ASIC has also reminded issuers that shorter PDSs must explain the applicable cooling-off period.
Further information can be found in the ASIC Information Sheet 155.