The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Regulations 2019 were registered on 29 November 2019.
The Regulations provide for a scheme by which conflicted remuneration in relation to financial product advice that remains payable on or after 1 January 1, 2021 will be rebated to customers by means of payments or other monetary benefits.
The regulations also impose record-keeping requirements on Australian financial services licensees who are required to rebate conflicted remuneration.
The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Act 2019 amended the Corporations Act to remove grandfathering arrangements for conflicted remuneration and other banned remuneration from 1 January 2021.
From 1 January 2021, instead of being paid to the financial services licensee, the financial adviser or the authorised representative, the conflicted remuneration must instead be rebated to product holders in a just and equitable way. The conflicted remuneration may be rebated in the form of a cash payment or in the form of another monetary benefit (for example, a reduction in fees). The amounts of money paid or monetary benefits provided must be just and equitable in the circumstances.