ASIC update on funeral expenses reform

The Australian Securities and Investment Commission (ASIC) has released an information sheet for providers of funeral expenses facilities following the recent changes to corporations regulations.

The latest amendments mean that entities who sell funeral expenses facilities will generally be required to hold an Australian financial services licence from 1 April 2020 and comply with relevant obligations, unless the facility does not meet the definition of a ‘financial product’ in s763A or 764A of the Corporations Act.

This includes any scheme or arrangement for the payment of money when a person dies, for the purpose of paying all or part of the expenses of, and incidental to, the person’s funeral, burial or cremation.

This new licensing requirement will provide greater legislative protection to consumers of funeral expenses facilities.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry  recommended removing the funeral expenses exemption after identifying harm to vulnerable consumers.

You can find more information on the ASIC website here.