In brief
The Federal Government has today announced that the start date for portfolio holdings disclosure reporting and choice product dashboard requirements will be deferred until 1 July 2015 to allow it further time to consult on the detail of the requirements. Partner Geoff Sanders and Lawyer Stephanie Malon report.
Background
The portfolio holdings disclosure obligations in section 1017BB of the Corporations Act 2001 (Cth) will require trustees of all registrable superannuation entities (RSEs) to publish information about the fund's portfolio holdings on (potentially) a look-through basis twice annually on a publicly-accessible section of the fund's website (see our earlier Focus: Superannuation portfolio holdings disclosure - deferral and further consultation).
The choice product dashboard obligations in s1017BA of the Corporations Act will require RSE trustees to publish key information about choice investment products on a publicly-accessible section of the fund's website, in order to enable greater comparability of superannuation products. The regulations which will prescribe the detailed content and presentation requirements of the dashboard have not been released.
The start day for both the choice product dashboard requirement and the first portfolio holdings reporting day was scheduled for 1 July 2014. However, less than two months out, the Government today announced that it will defer both requirements until 1 July 2015. Given the Government is yet to publish its findings on the portfolio holdings disclosure and choice dashboard rules arising out of its November 2013 Discussion Paper, the Minister for Finance and Acting Assistant Treasurer's announcement that the start dates will be deferred is unsurprising. The media release makes clear that the Government intends to use the additional time to consult on the detail of the requirements, and notes that the deferral will provide industry more time to implement the necessary changes.
Likely areas of focus
As noted above, it is clear that further work needs to be done before a final set of rules on the portfolio holdings disclosure regime and the form of the choice dashboard are settled. Based on submissions received in response to the Government's November 2013 Discussion Paper, we expect that the further review by the Government is likely to focus on the following aspects of the requirements:
Portfolio holdings disclosure
- the extent of the 'look-through' nature of the disclosure required (ie, whether disclosure should be limited to the first non-associated entity level or should extend to other holdings);
- whether a materiality threshold should be included; and
- whether there should be a carve-out to disclosure requirements for confidential or commercially sensitive information.
Choice product dashboard
- the appropriate content and presentation of dashboards in light of the large variety of choice product structures;
- whether there should be a new longer-term investment risk measure instead of (or as well as) the Standard Risk Measure; and
- whether the existing proposed carve-outs from the requirement to publish a dashboard should be expanded.
What's next
Trustees and investment managers should note that it is clear that the Government is committed to implementing the portfolio holding disclosure and choice product dashboard obligations in some form.
Accordingly, we believe that RSE trustees should continue to actively prepare themselves for the introduction of both regimes.
In particular, if (as we expect) the deferral to the portfolio holdings disclosure rules is implemented by way of a mere deferral of the first reporting date, trustees need to be aware that the information gathering and supporting obligations of the rules will continue to apply for the entire period up to 1 July 2015. Accordingly, trustees will need to ensure that (where necessary) they continue to put in place appropriate provisions in their investment documentation to enable them to comply with portfolio holdings disclosure requirements (see our earlier Focus).