Today's successful passage of the Treasury Laws Amendment (Measures No 1) Bill 2016 will better protect retail investors and promote innovation, growth and jobs.
"The Bill demonstrates the Government's commitment to taking practical action to ensure Australian consumers are protected when they engage with financial product and service providers, whilst at the same time fostering a business environment that encourages entrepreneurialism", the Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, said.
It also delivers on significant undertakings made by the Turnbull Government to advance the National Innovation and Science Agenda; and to implement thorough and systematic reform of the financial sector, informed by the 2014 root-and-branch Financial System Inquiry led by Mr David Murray AO.
The Bill:
- Better protects retail investors by closing a loophole that has allowed financial services firms to use their clients' money for their own purposes, rather than holding it on trust for their clients; and
- Promotes innovation and enterprise by enabling Australian businesses to incentivise their staff via an employee share scheme (therefore making it easier for Australian start-up companies to recruit and retain talent).
"The Bill complements a suite of legislation enacted in recent months, such as legislation to raise the professional and ethical standards of financial advisers and addressing high upfront commissions on life insurance product sales, that reinforce Australia's reputation as a safe place to invest, and an excellent place to do business," Minister O'Dwyer said.
"Legislating now means that in the unfortunate event that another broker fails, retail investors should get their client money back quickly, unlike many clients of MF Global Australia where repayment of client money was significantly delayed.
"The changes to employee share scheme regulation build on the improvements to the taxation treatment of employee share schemes, which the Government introduced in 2015. We made those changes because we wanted to spur innovation and entrepreneurship and help Australian businesses be more competitive in recruiting and retaining talent in the international labour market. These reforms will enable start-ups to offer share schemes to employees without having to publicly disclose potentially commercially sensitive information when lodging disclosure documents with ASIC."