The Rudd Government today released draft regulations for margin lending disclosure and an example Product Disclosure Statement for public consultation.
This is the first time that a formal disclosure regime for margin lending has been developed. The disclosure framework complements the wider national margin lending regime currently being considered by Parliament, as part of the new single Commonwealth managed consumer credit system developed under the Council of Australian Governments' Seamless National Economy Reform Agenda.
The regime will reduce costs and complexity for business while ensuring better protection for investors through simple, effective disclosure of product information.
The draft regulations and an example Product Disclosure Statement were developed by the Rudd Government's Financial Services Working Group as part of the Government's better regulation agenda.
Minister Bowen said: "The example PDS contains key product information in the equivalent of only three A4 pages and uses stark language to highlight the potential 'bottom line' for the consumer. It shows that it is possible to produce financial disclosure documents that are short, clear and easy to read, without any diminution of investor protection."
Minister Tanner said: "Consistent with our ambitious deregulation agenda to improve productivity, the framework allows more detailed or frequently updated information to be provided online which will result in genuine savings to business."
Minister Bowen said the regulations were developed with extensive consultation with industry. "I would especially like to thank the Margin Lending Industry Consultation Group for their contribution and we look forward to receiving public comment on these new materials."
The draft regulations, explanatory material and example PDS are available at the websites of the Treasury, the Department of Finance and Deregulation and the Australian Securities and Investments Commission.
Comments on the draft Corporations Amendment Regulations 2009 (No. ) are sought by 23 October 2009 and should be submitted to financialservices@treasury.gov.au.
24 September 2009