Home / Life Insurance / Government to ban stamping fees
25 May 2020
The Federal Government has announced it would ban the payment of stamping fees in relation to listed investment companies (LICs) and trusts, following a Treasury consultation on the matter.
The fees are an upfront one-off commission paid to financial services licensees for their role in capital raisings associated with the initial public offerings of shares.
A statement from Treasurer Josh Frydenberg’s office says the changes will take effect from July 1.
“Whilst new LICs capital raisings have largely ceased since the inception of COVID-19, it is important that the ban on conflicted remuneration is extended ahead of any resumption of capital raising activity,” the statement said.
“Extending the ban on conflicted remuneration to LICs will address risks associated with the potential mis-selling of these products to retail consumers, improve competitive neutrality in the funds management industry and provide long-term certainty so that this segment of Australia’s capital markets can continue to operate effectively and provide investors with opportunities to diversify their investments.”
The Financial Planning Association (FPA) has welcomed the move, saying it will provide Australians with the confidence to invest in LICs and trusts.