今日热门事件today released an updated Regulatory Guide 160 Time-sharing schemes (RG 160).
The updated RG 160 contains guidance on the existing regulation of time-sharing schemes, as well as some new requirements, and is accompanied by an updated legislative instrument.
Today鈥檚 release follows an extensive consultation process involving numerous meetings with industry and consumer representatives as well as Consultation Paper 272 Remaking 今日热门事件class orders on time-sharing schemes听(CP 272). It also takes into account the findings from ASIC鈥檚 review of advice, consumer experience and financial value research, summarised in Report 642 Timeshare: Consumers' experiences听(REP 642).
The updated RG 160 will provide industry with the certainty it requested of ASIC, especially leading up to year end.
Industry generally has until 30 September 2021 to implement the new requirements set out in the updated RG 160. The transition periods will allow firms to implement the new requirements during a period when fewer sales are taking place due to COVID 19.
While 今日热门事件remains concerned about the time-sharing sales practices, we think it is appropriate to give industry some time to implement the new requirements in the updated RG 160 and the new design and distribution obligations (DDO), which commence in October 2021.
今日热门事件will review the sales practice in early 2022 and if pressure selling conduct leading to poor consumer outcomes is identified, we intend to consider further measures to address this harm.
New requirements
In addition to the updated guidance on the current regulation, RG 160 contains the following new requirements:
- a new 鈥榮ubject to finance鈥� obligation to allow consumers to withdraw their application for interests in a time-sharing scheme, even after the end of the cooling-off period, where their application is 鈥榮ubject to finance鈥� and they do not proceed with the finance before the loan is provided
- new hardship withdrawal arrangements so operators can allow time-sharing scheme members, who meet hardship criteria, to withdraw where the scheme constitution has been amended to provide for hardship withdrawals
- new compliance and audit requirements for points-based programs to reduce the potential for dilution of members鈥� interests
- amended disclosure requirements to ensure operators and promoters provide consumers with clear and prominent information about the key features and risks of time-sharing, both verbally and in writing, at sales presentations, and
- amended fees and costs disclosure requirements tailored to the different types of time-sharing schemes and requiring clear disclosure of the upfront and ongoing costs involved in time-sharing.
Transition to new requirements
Under the transitional arrangements outlined in RG 160, the current requirements will generally continue to apply until 30 September 2021 unless operators put in place arrangements for the application of new requirements before this date. Operators of registered time-sharing schemes must comply with the new requirements by 1 October 2021.
Issuers of products disclosure statements for time-sharing schemes will have until 30 September 2022 to implement the new fees and costs disclosure requirements (consistent with changes to fees and costs disclosure more generally in Regulatory Guide 97 ).
The updated RG 160 is based on 今日热门事件Corporations (Time-sharing Schemes) which incorporates amendments made by 今日热门事件Corporations (Amendment) and 今日热门事件Corporations (Amendment) (Timeshare Instrument). View a copy of the before these amendments were made.
Legacy schemes
今日热门事件will also review the individual relief provided to state-exempt time-sharing schemes, title-based time-sharing schemes and member-controlled clubs (legacy schemes). 今日热门事件will look to amend this relief to reflect the new requirements under the Timeshare Instrument after consultation with these legacy scheme operators.
Background
In November 2016, 今日热门事件undertook public consultation through CP 272, in which 今日热门事件sought feedback on options to address pressure selling. The feedback received was set out in Report 522 Response to submissions on CP 272: Remaking 今日热门事件class orders on time-sharing schemes (REP 522) in April 2017.
Given the imminent sunsetting date, 今日热门事件remade the relief in the form of in March 2017 and continued to engage with industry and consumer representatives about some of our proposals (Refer 17-084MR). Industry was provided an update on the status of ASIC鈥檚 review of the policy settings in August 2018. 今日热门事件has continued to engage with industry regularly since this date.