Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2013-2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
CORPORATIONS AMENDMENT (FINANCIAL ADVICE) BILL 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Whish-Wilson)
Corporations Amendment (Financial Advice) Bill 2014
BACKGROUND
Currently under the Corporations Act financial advice is classified under two categories.
'Personal advice' is financial product advice which takes into account the personal financial
circumstances of the client. Any other financial product advice that does not take into account
the client's personal circumstances is termed 'general advice.'
The purpose of this Bill is to ensure that in reference to financial advice the term 'advice' can
only be utilised in reference to financial advice that takes into account the personal
circumstances of the consumer. Any 'general advice' will now have to be termed 'general
information.'
This will help ensure personal advice is differentiated from information that is provided to
sell general financial products with little or no consideration of an individual's financial
situation or needs.
The Bill also mandates that when 'general information' is provided to a retail client the client
must be warned that the information is not advice.
NOTES ON CLAUSES
Clause 2
Clause 2 outlines the Bill's commencement. Clauses 1 - 3 of the Bill will commence on the
day after the Act receives the Royal Assent. Schedule 1 will commence the day after 6
months after the Act receives Royal Assent.
Schedule 1 - Amendments
Schedule 1 contains amendments the Corporations Act 2001.
Items 1 to 17 and 20 to 22 provide for references to "general advice" to be replaced with
references to "general information".
Items 18 and 19 amend section 949A to require the existing warning to a client that general
information does not take account of the client's objectives, financial situation or needs to
also include a warning that the general information is not advice.
2
Statement of Compatibility with Human Rights
Corporations Amendment (Financial Advice) Bill 2014
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Overview:
The purpose of this Bill is to ensure that in reference to financial product advice the term
'advice' can only be utilised in reference to financial advice that takes into account the
personal circumstances of the consumer.
Human Rights Implications:
This Bill does not engage any of the applicable rights or freedoms.
Conclusion:
This Bill is compatible with human rights as it does not raise any human rights issues.
3