ASIC is to issue
strict new guidelines for stockbrokers aimed at improving disclosure of
possible conflicts of interest when they’re assessing the performance
of companies for private clients.
Under new guidelines revealed today in Eureka Report,
ASIC will demand that brokers disclose the dollar amount they receive
in fees from companies they may be recommending to private investors.
broker recommending shares in a company while also picking up fees for
work will have to reveal the amount of money received from the company
in a research note, according to the deputy chairman of ASIC, Jeremy
A review of disclosure guidelines has become pressing
in recent months as big companies – such as Westfield and Telstra –
increasingly hire many different broking companies on a single deal.
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present regulations stockbrokers do not have to explicitly reveal the
dollar income they receive from companies that they also assess for
Cooper said the regulator is also planning to
enforce the new disclosure regime on stockbrokers who may be facing a
conflict of interest in takeover situations. He suggested that if a
stockbroker issues research on a company while simultaneously acting
for the company in a takeover, the dollar amount of fees collected by
the broker for takeover advice must be revealed on research documents.
“We want to give the retail consumer some idea of where the adviser sits in all this,” says Cooper.
regulator has also stepped up its attempts to improve standards among
financial planners with a range of new initiatives to improve the
introduction of Superannuation choice. Cooper also signalled the
regulator is planning a crackdown on the sale of life insurance to low
income consumers who do not need it.
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