The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, today announced the commencement of national regulation of licensed trustee companies.
"The national regulation of licensed trustee companies delivers an another important economic reform through the Council of Australian Government's (COAG) Reform Agenda," Minister Bowen said.
"The new laws will ensure that the interests of consumers – including charitable trusts and beneficiaries of trusts and estates managed by trustee companies – are protected to the greatest extent possible."
The scheme will result in a national market for traditional trustee company services, and replaces the eight separate State and Territory regimes which currently exist. The new Commonwealth regime will increase consumer protection, cut red tape for trustee companies conducting business in more than one jurisdiction, and lower barriers to entry, promoting competition in the industry.
The national regime is contained in Schedule 2 of the Corporations Legislation Amendment (Financial Services Modernisation) Act 2009, and in regulationsamending the Corporations Regulations 2001 and the Australian Securities and Investments Commission Regulations 2001, all of which commenced on 6 May 2010.
Under the new laws, traditional trustee company services provided by licensed trustee companies will now be regarded as financial services under Chapter 7 of the Corporations Act 2001 and Part 2, Division 2 of the Australian Securities and Investments Commission Act 2001. This means these services will be regulated by the Australian Securities and Investments Commission (ASIC).
As a result, trustee companies will be subject to a range of new obligations covering financial product disclosure, licensing, fees, conduct and advice, as well as internal and external dispute resolution mechanisms.
The package of legislation, regulations and related explanatory material on trustee companies can be found and downloaded at www.comlaw.gov.au.
7 May 2010