New RG97 Regulatory requirements revises and changes the presentation and calculation of certain fees and costs in the PDS.
The updated RG97 legislation requires further fees and costs information to be included in overall fees and costs calculations by 30 September 2022. The new disclosures provide further enhancements to fees and costs disclosure and includes net transaction costs and buy/sell spreads in the ‘Summary of Fees’ table and also includes net transaction costs in the ‘Example of annual fees and costs’. It is important to note these fees and costs have always existed and factored into your net-of-fee returns. We are simply changing the way they are displayed and incorporating some extra costs into the worked examples.
Frequently Asked Questions
What's changing?
- The presentation and calculation of certain fees and costs in a PDS will be changing
- The updated RG97 legislation requires information to be included in overall fees and costs calculations
Please view Regulatory information here.
Presentation: What's changing in the PDS?
The prescribed ‘Fees and Costs Summary’ table will be amended to include all ongoing annual fees/costs as well as member activity related fees/costs in a summary form (in a single table).
The ongoing annual fees/costs section will have three subcategories:
- Management fees and costs (including indirect costs)
- Performance fees
- Transaction costs
All performance fees will be in a single category. ‘Performance-related fees’ (the performance fees charged by interposed vehicles) which were previously categorised as indirect costs, will now be categorised and included in the ‘performance fees’ category.
Worked examples will be expanded to include net transaction costs as part of the example, which in many cases will mean that the overall dollar costs will increase – this does NOT mean that fees and costs have increased for a fund – just the way that the fees are disclosed, and the calculation of the example has been expanded.
Calculation: What's new?
Performance fees will be calculated and averaged over a 5-year period.
The following costs will be excluded from transaction costs:
- Implicit transaction costs (excl. OTC derivatives)
- Property operating costs
- Borrowing costs
Additional disclosure
- The performance fees charged by the Responsible Entity will be disclosed in the ‘Additional Explanation of fees and costs’ section of the PDS/IBR.
- The ‘Cost of Product’ information will be disclosed for all investment options in a PDS for multi-funds.
- The cost of product information includes net transaction costs (i.e. those costs not offset by the buy/sell spreads for the Fund) and performance fees.
When will the changes take effect?
- ASIC have provided a 2-year implementation period with a final date of 30 September 2022.
- AMP intend to have PDS’s issued from 30 May 2022.
- Changes to the calculation methodology will be implemented for the financial years ended December 2021 and June 2022 (varies depending on the actual fund’s financial year).
What does this mean?
- New disclosure requirements will apply to all PDS’s issued on or after 30 September 2022.
- Periodic and exit statements with reporting periods commencing from 1 July 2021 have had to comply with the new requirements.
- Early opt-in is not available for PDS’s
How is a performance calculation made to a product, option, or interposed vehicle if it did not have a performance-fee-charging mechanism in place in each of the previous five financial years?
The average is calculated by reference to the number of financial years in which it had a performance-fee-charging mechanism in place.
Will I receive the old or new methodology?
- Until advised by ASIC, AMP will provide data to clients supporting both the new and old methodology up until 30 September 2022.
- From 30 September 2022, the RG97 data will be provided in the new methodology only.
Can I choose which methodology I want?
Yes, AMP will provide data to clients under their preferred methodology.
What you need to know
This information is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of National Mutual Funds Management Ltd (ABN 32 006 787 720, AFSL 234652) (NMFM).
While every care has been taken in the preparation of this information, NMFM makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to the investor’s objectives, financial situation and needs.
ipac Asset Management Limited ABN 22 003 257 225, AFSL 234655) (IAML) is the responsible entity of the fund(s) and the issuer of the units in the fund(s) and the Product Disclosure Statement(s) (PDS). To invest in the Fund(s), investors will need to obtain and consider the current PDS or other offer document for the relevant Funds(s) available at amp.com.au/investments-pds. The PDS or offer document contains important information about investing in the Funds(s) and it is important that investors read the PDS or offer document before making a decision about whether to acquire, or continue to hold or dispose of units in the Funds(s). A target market determination has been made in respect of the Funds(s) and is available at www.amp.com.au/investments-tmd. Neither IAML, NMFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this document. Past performance is not a reliable indicator of future performance.
All information on this website is subject to change without notice.
The information included on this page was current on the date published within the document or report and issued by the entity identified in the document or report . For up-to-date information, we refer you to the relevant product disclosure statement, target market determination and product updates available at amp.com.au.