Government Consults on Product Rationalisation Proposal
14 December 2009
The Minister for Financial Services, Superannuation and Corporate Law today released a Proposals Papers as the next step in consultation with stakeholders on product rationalisation for managed funds and the life insurance industries.
Product rationalisation is a process of converting or consolidating products, such as managed fund or life insurance products, of a similar nature into a single product with equivalent features and benefits.
Introducing a product rationalisation mechanism would benefit investors by transferring investors into modern products with superior features and would also remove a significant source of risks of error and fraud in the financial system by closing outdated legacy products.
Product rationalisation is a complex problem involving a range of issues that need to be addressed, including appropriate measures to address taxation issues.
The proposals set out in the Proposals Paper were those developed in consultation with a panel of experts and do not represent government policy at this stage.
Consultation process
This Proposals Paper follows on from an Issues Paper on product rationalisation published in June 2007. The paper contains a proposed product rationalisation framework including specific mechanisms for rationalising legacy products in managed investments and life insurance, and seeks relevant comments from the public on the framework and the proposed mechanisms.
Interested parties are invited to make written submissions that address, but need not be limited by, the issues and questions raised in this paper.
Submissions may be lodged electronically, by post or facsimile. Please direct submissions to:
Product rationalisation project
Corporations and Financial Services Division
The Treasury
Langton Crescent
PARKES ACT 2600
Telephone inquiries may be made by calling (02) 6263 3971.
The closing date for submissions is 26 February 2010. Submissions may appear on the Treasury website, www.treasury.gov.au (subject to any claims for confidentiality).
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