On 21 May 2020, then Treasurer, the Hon Josh Frydenberg MP, announced the Australian Government would extend the ban on conflicted remuneration to listed investment companies and trusts, commencing 1 July 2020.
As this measure was likely to have major impacts on affected businesses and individuals, a Regulation Impact Statement (RIS) was required to be prepared, but was not completed and assessed by the Office of Best Practice Regulation (OBPR) prior to the final decision. Consequently, the OBPR assessed the RIS process for the proposal as insufficient with the Australian Government’s Regulatory Impact Analysis requirements. Accordingly, a post-implementation review was required to be completed within two years of its implementation.
The Treasury has completed the post implementation review for the Extending ban on conflicted remuneration for listed investment companies and trusts, which has been assessed as adequate by the OBPR.
The post implementation review concluded that the regulation met its stated objective of removing a form of conflicted remuneration, which as theoretical flow-on benefits to quality of advice and consumer outcomes. However inability to control for impacts of the COVID-19 pandemic and other macroeconomic factors on the market, and the absence of appropriate available data to quantify consumer impacts, limited the ability of Treasury’s analysis to draw definitive conclusions about the net benefit of the regulation.