For all ongoing fee arrangements that are in force immediately before 1 July 2021, the Financial Sector Reform Act 2021 introduced transitional arrangements for fee recipients in relation to providing FDS’s.
As a fee recipient, you must give the client an FDS (Fee Disclosure Statement) between 1 July 2021 and 30 June 2022 (i.e., the transition period) for an existing ongoing fee arrangement.
The ‘transition day’ for an ongoing fee arrangement is defined in the law. It is the earlier of:
- The day that you give an FDS to the client, or
- The last day of the transition period (i.e., 30 June 2022).
If the client is falling under the transition period, you now have the option to update its status to “Transitional Clients” under compliance tab.
When the “Transitional Clients” switch is turned off, Disclosure Due Date will be 60 days apart from the Anniversary Date for the client.
- Application Date = 01/10/2021
- Agreement End Date = 30/09/2022
- Anniversary Due Date = 01/10/2022
- Disclosure Due Date = Anniversary Date + 60 Days = 01/10/2022 + 60 Days
- Disclosure Due Date = 30/11/2022
When the “Transitional Clients” toggle is switched on, Disclosure Date will become same as the Anniversary Date for the client.
- Application Date = 01/10/2021
- Anniversary Date = 01/10/2022
- Disclosure Due Date = Anniversary Date
- Disclosure Due Date = 01/10/2022
Cases when the “Transitional Clients” toggle is Switched ON: -
- Disclosing FDS on the Disclosure Due Date card by clicking on “Mark as Disclosed” will make no changes to the “Transitional Clients” toggle, it will remain switched on.
- Marking the client as Renewed on the Renewal Due Date card by clicking on “Mark as Renewed” will make no changes to the Transitional Clients toggle, it will remain switched on.
- Marking the client as Confirmed on the Consent Renewal Due Date card by clicking on “Mark as Confirmed” will switch off the “Transitional Clients” toggle and dates on all the cards will get updated for the next year automatically.
- Marking the client as Terminated, Confirmed and Fee Switched Off will have no impact on the “Transitional Clients” toggle, it will remain Switched On.
- Reinitiating the Agreement on the Consent Renewal Due Date card will switch off the “Transitional Clients” toggle.
PS: If there are no dates filled in for the client on the compliance tab, Adviser will not be able to update its status to “Transitional Client.”