FSC Standards fact sheet Fact sheet
STANDARD NO. 1
CODE OF ETHICS & CODE OF CONDUCT- (Current to 30 June 2018)
CODE OF ETHICS & CODE OF CONDUCT - (Effective from 1 July 2018)
The Code of Ethics and the Code of Conduct are designed to promote an investment and financial services industry of the highest integrity. The Codes recognise that the object of industry participants is to work to the highest standards of professionalism and generally meet and where possible exceed the public's expectations. The Code of Conduct sets out the procedure for Financial Services Council members to comply with Financial Services Council Standards and the sanctions applied to those members in breach.
STANDARD NO. 2
The main features of this Standard are: to indicate to Managers, when reporting dividend imputation credits derived from investments in Australian shares, the formats they may choose to report the credits to their Investors; The formula for calculating the franking level of distributed Income; and the basis for quoting Franking Credits.
STANDARD NO. 3
INVESTOR REPORTING (REPEALED)
The Financial Services Council Board has repealed Financial Services Council Standard No 3 - Investor Reporting (retrospectively, effective from 1 July 2003). The Standard was repealed on the grounds that the Financial Services Reform Act ("FSRA") is prescriptive in the area of periodic reporting and confirmation of transactions.
STANDARD NO. 4
ONGOING FEE MEASURE (REPEALED)
This Standard was repealed in February 2004 and adopted as Guidance Note No. 18 and 19. (Also refer to Financial Services Council Circular dated Monday 16 May 2005). Guidance Note No. 18 and 19 were repealed when the Government Indirect Cost Ratio came into effect on 1 July 2006.
STANDARD NO. 5
OPERATIONAL CAPABILITY STANDARD (REPEALED)
FSC Standard 5 Operational Capability has been repealed effective from 1 July 2013, as the Standard has been superseded by numerous financial services law reforms and regulator requirements. Standard 5 was issued in 1999 and covered the obligations of FSC Members in relation to various matters including business continuity, insurance, audit, dispute resolution and resources. Since 1999 there have numerous legislative reforms and regulator requirements which superseded Standard 5, such as the financial services licensing reforms in 2001, the superannuation licencing reforms, APRA prudential standards and guidance and ASIC regulatory guides.
STANDARD NO. 6
PRODUCT PERFORMANCE: CALCULATION OF RETURNS
The main features of this Standard are to specify the principles adopted when calculating Total, Growth and Distribution Returns; enable proper assessment of Product returns when comparing Month-End returns, after fees and tax paid by the Product, with market indices and other Products (ie peer comparisons), ensure there is as much consistency as possible with the Australian Investment Performance Measurement and Presentation Standards and Global Investment Performance Standards.
STANDARD NO. 6B
CALCULATION OF RETURNS: SUPER INVESTMENT OPTIONS (REPEALED)
This Standard was repealed by the Financial Services Council Board on 28th October 2010.
STANDARD NO. 7
REFERENCES TO THE FSC LOGO
This Standard sets out the requirements for the use of the Financial Services Council logo. For higher resolution or other format versions of the logo please contact the Membership Manager at firstname.lastname@example.org or on (02) 9299 3022. To download the FSC Brand Guidelines click here.
STANDARD NO. 8
This Standard sets out the principles to be adopted in the calculation of Scheme prices, and prescribes standards for, among other things, transaction cost factors, arbitrage opportunities, backdating, frequency of pricing, rounding adjustments and process documentation. Standard No. 8 has been subject to substantial revisions, transitional arrangements apply. The new Standard is mandatory for all members from 1 July 2007. In the meantime, Financial Services Council members should comply fully with either the old Standard or the new Standard. Members are welcomed to comply with the new Standard before the effective date.
STANDARD NO. 9
VALUATION OF SCHEME ASSETS & LIABILITIES
This Standard sets out the principles to be adopted in the valuation of Scheme assets and liabilities and provides guidance in the interpretation and application of those principles. The Standard prescribes, among other things, standards relating to independence, market values, the existence of properly regulated markets and valuation frequency. Standard No. 9 has been subject to substantial revisions, transitional arrangements apply. The new Standard is mandatory for all members from 1 July 2007. In the meantime, Financial Services Council members should comply fully with either the old Standard or the new Standard. Members are welcomed to comply with the new Standard before the effective date.
STANDARD NO. 10
PRESENTATION OF RETURNS INFORMATION: SUPER & NON-SUPER INVESTMENT (REPEALED)
This Standard has been repealed in accordance with the Board's decision to repeal Standard 6B: Calculation of Returns: Superannuation Investment Options.
STANDARD NO. 10
PRESENTATION OF PAST PERFORMANCE INFORMATION & VISUAL PROMOTIONS
The main features of this Standard are: To specify standards to be adopted by a Financial Services Council member in the promotion of its Financial Products and Services; as well as provide guidance in the interpretation and application of those standards.
STANDARD NO. 11
GENETIC TESTING POLICY
The Genetic Testing Policy Standard sets the framework for Financial Services Council's life insurance members in dealing with genetic testing.
STANDARD NO. 12
ASIC FEE TEMPLATE (REPEALED)
The Financial Services Council Board has repealed Financial Services Council Standard No. 12 - ASIC Fee Template in response to the Government introducing the Enhanced Fee Disclosure Measures (Corporations Amendment Regulations 2005) from 1 July 2005. The regime effectively removes the need for this Standard.
STANDARD NO. 13
VOTING POLICY, VOTING RECORD & DISCLOSURE
The main purposes of Standard 13 Voting Policy, Voting Record and Disclosure are:
(a) in relation to Australian investments, to require the formulation of an Operator’s voting policy (including proxy voting) for each Scheme it operates;
(b) whether or not an Operator engages the services of a voting or proxy consultant in exercising its voting rights; and
(c) to require disclosure of the above matters and details of the exercise of such voting rights by the Operator (on an “entity and resolution level” basis) in respect of each financial year for each Scheme it operates.
(“Scheme” is defined in FSC Guidance Note 5 Industry Terms and Definitions, and includes REs of registered schemes and RSE licensees of superannuation funds).
STANDARD NO. 14
ALTERNATIVE FORMS OF REMUNERATION IN WEALTH MANAGEMENT INDUSTRY (REPEALED)
Standard 14 was withdrawn effective 30 June 2013 in light of the commencement of the Future of Financial Advice reforms on 1 July 2013.
STANDARD NO. 15
REBATES & RELATED PAYMENTS (“GUIDE”) (REPEALED)
Standard 15 was withdrawn effective 30 June 2013 in light of the commencement of the Future of Financial Advice reforms on 1 July 2013.
STANDARD NO. 16
FAMILY MEDICAL HISTORY POLICY
The main features of this Standard are: The Family Medical History Policy to be adopted by a member in the operation of its life insurance business; and Guidance in the interpretation and application of those standards.
STANDARD NO. 17
INCORRECT PRICING OF SCHEME UNITS – CORRECTION & COMPENSATION
This Standard sets minimum requirements for occasions when incorrect prices have been calculated and transacted upon and for determining when compensation is required that arises as a result of incorrect unit prices. Standard No. 17 has been upgraded from Guidance Note No 4 and will be effective on 1 July 2007.
STANDARD NO. 18
BEST PRACTICE GUIDANCE FOR DISCLOSURE IN THE MORTGAGE TRUST SECTOR (REPEALED)
This Standard was repealed effective 6 August 2017.
STANDARD NO. 19
ADVISER FEES IN SUPERANNUATION (REPEALED)
Standard 19 was withdrawn effective 30 June 2013 in light of the commencement of the Future of Financial Advice reforms on 1 July 2013.
STANDARD NO. 20
SUPERANNUATION GOVERNANCE POLICY
The purpose of Standard 20 Superannuation Governance Policy is to promote strong governance arrangements by trustees of superannuation entities. Standard 20 includes requirements for:
(a) the board of a superannuation RSE licensee to consist of a majority of independent directors and also have an independent chair;
(b) a prohibition on competing directorships (namely, acting as a director on competing superannuation funds);
(c) ESG risk reporting disclosure for MySuper investment options;
(d) an RSE licensee board policy concerning diversity of board membership; and
(e) disclosure of proxy voting records (the proxy voting requirement applies to both superannuation RSE licensees and responsible entities of registered managed investment schemes – also see FSC Standard 13 Voting Policy, Voting Record and Disclosure).
STANDARD NO. 21
MENTAL HEALTH EDUCATION PROGRAM & TRAINING
The purpose of this Standard is to ensure individual representatives or entities authorised by a life insurer to provide information to consumers in respect of the management of a FSC Member’s life insurance products receive an appropriate level of education and training in relation to ‘mental health’ awareness. This Standard also requires the Member to review the effectiveness of the Member’s Mental Health Education Program designed to ensure mental health awareness among such representatives or authorised entities. An FAQ has also been provided to assist.
STANDARD NO. 22
CULTURAL CAPABILITY IN NATIVE TITLE SERVICES
The purpose of this Standard is to encourage good practice in the provision of tailored, culturally-appropriate financial services to assist Communities to achieve their goals and aspirations. In adhering to this Standard, FSC trustee members commit to working in partnership with Communities, recognising their diverse governance structures, cultural practices, and languages. This Standard is also intended to support trustees to build sustainable, respectful relationships with their clients, acknowledging that it makes good business sense to do so. Nothing in this Standard displaces FSC Members’ obligations under law.
STANDARD NO. 23
PRINCIPLES OF INTERNAL GOVERNANCE AND ASSET STEWARDSHIP
This Standard has been drafted to provide guidance to FSC Members who undertake the role of Asset Managers in setting and achieving best practice in fulfilling their fiduciary responsibility as custodians of one of the largest pools of managed funds in the world.
LIFE INSURANCE CODE OF PRACTICE
The purpose of the Code is to encourage good practice and high standards of service in the provision of life insurance.
To download the Code and other resources click here.
STANDARD NO. 24
APPROVED PRODUCT LIST
The purpose of this Standard is to encourage high standards in life insurance Approved Product List (APLs) construction practices that encourage competitive access and choice for advisers and their clients in life insurance products. The Standard also outlines processes for ‘off’ APL recommendations to ensure that advisers can access other products to enable them to meet best interest obligations.