Key Points:
Platform operator must not accept volume-based
shelf-space fees and financial services licensees (and its
representative) must not charge asset-based fees on borrowed
amounts
The Australian Government's Future of Financial Advice
(FOFA) reform commenced on 1 July 2012 and
compliance will be mandatory from 1 July 2013.
In our last article
we looked at the ban on conflicted remuneration in detail. In
this article we'll look at the ban on other remuneration,
namely, the ban on volume-based shelf-space fees and the ban on
asset-based fees on borrowed amounts.
Ban on volume-based shelf-space fees
In the industry, it is common place for a platform operator to
charge a "shelf-space fee" to a product issuer or funds
manager in exchange for making a product issuer's or funds
manager's product available through the platform operator's
platform.
