Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 466

ASA’s view on the banning of LIC commissions

This is a copy of the ASA's submission to Treasury's post-implementation review of the banning of stamping fees, in response to this request:

Treasury is seeking feedback from consumers and industry stakeholders on the 2020 change which extended the ban on conflicted remuneration to ‘stamping fees’ paid by Listed Investment Companies (LICs) and Listed Investment Trusts (LITs).

Treasury is seeking feedback on

  • the policy’s regulatory impacts on advisers and stockbrokers
  • changes to consumers' investment choices
  • competition settings for managed funds, and
  • any other unintended consequences in the market.

Stamping fees are an upfront one-off commission paid to Australian financial services licensees for their role in capital raisings associated with the initial public offerings of shares.


The Australian Shareholders’ Association (ASA) represents its members to promote and safeguard their interests in the Australian equity capital markets. The ASA is an independent not-for-profit organisation funded by and operating in the interests of its members, primarily individual and retail investors, SMSF trustees and investors generally seeking ASA’s representation and support. ASA also represents those investors and shareholders who are not members, but follow the ASA through various means, as our relevance extends to the broader investor community.

Consultation process on stamping fees

Thank you for the opportunity to submit comments to the post-implementation review on the removal of the stamping fee exemption.

We will briefly address 4 of the 5 questions posed, grouping 1 and 3:

1.What impact has the policy change had upon retail investors?
3.How have consumers’ investment choices been affected?
4.Has the policy beneficially changed competition settings in the managed funds sector? and
5.Have there been unintended consequences resulting from the policy changes?

1 and 3. What impact has the policy change had upon retail investors and how have consumers’ investment choices been affected?

We maintain the policy stance enunciated in our submission in 2020 on the merits of the current stamping fee exemption in relation to listed investment entities, that there be no carve out of a subset of listed entities from the overarching exemption. We remain concerned that access to initial public offers (IPOs) is denied to many retail shareholders, denying them the ability to access risk- and price-appropriate assets.

We consider the removal of the stamping fee exemption has reduced the number of listed investment companies (LICs) and listed investment trusts (LITs) coming to market and hampered the creation of new and innovative listed entities designed to meet perceived investor need.

Since the policy change in May 2020, there have been few IPOs of LICs and LITs, with fewer being made available as general offers. The Magellan Global Fund (MGF) listed in November 2020 and was a compliance listing merger of two pre-existing funds; Salter Brothers Emerging Companies Limited (SB2) listed in June 2021; WAM Strategic Value Limited (WAR) listed in June 2021; Touch Ventures Limited (TVL) listed in September 2021 (and had no general offer); and Cadence Opportunity Fund Limited (CDO) listed in November 2021 after commencing as an unlisted fund in January 2019.

The overall statistics in the three tables below, show a reduction of the number of listings of LICs and LITs, and modest growth of $0.08b in the 12-month average transaction value from 2020 to 2022. This compares to an increase in number and lift in the 12-month average transaction value of $7.63b for selected unlisted managed funds available via the ASX (m-Funds) and $2.49b for exchange traded products (ETPs).

Source: ASA and ASX Investment Products reports May 2022 and May 2020

4.Has the policy beneficially changed competition settings in the managed funds sector?

There has been an increase in the number and the market capitalisation of m-Funds as shown in the table below and for unlisted funds. ICI Global, in its Worldwide Public Tables for the end of 2021, stated the total assets in Australian unlisted managed funds were valued at about $3.5 trillion, or in US$2.6 trillion and increase from US$2.5 trillion.

Source: ASA and ASX Investment Products reports May 2022 and May 2020

5.Have there been unintended consequences resulting from the policy changes?

It is our understanding from reading the initial consultation paper that the intention of the removal of the stamping fee exemption was intended to relatively advantage managed funds compared to LICs and LITs. It also appears to have advantaged exchange traded products.

Source: ASA and ASX Investment Products reports May 2022 and May 2020

In summary, ASA considers the removal of the stamping fee exemption should end, and retail investors be allowed to choose appropriate investments.

We also flag the short eight working day consultation period, with the notification email received at 5pm Tuesday, 28 June and comments required by Sunday, 10 July. We believe short notice periods act to limit the consultation, reducing the number and depth of submissions. We request that longer consultation be considered for future stakeholder engagement on important matters to retail investors.


Rachel Waterhouse is Chief Executive Officer of the Australian Shareholders’ Association


Goronwy Price
July 18, 2022

I have no problem organisations earning a commission for selling any product or service. However they should not be called “Financial Advisors” if they are selling something to you for their benefit and not giving impartial advice. They are in that context brokers or agents and not advisors. Advisors should charge a fee for service and give impartial advice.

July 17, 2022

People have switched to ETFs ( both passive and active ) largely because of lower fees, more diverse and focussed choices ( eg Healthcare ETF ) and buying & selling at NAV rather than the crazy discounts and premiums that marr LICs.
Investors have not made this change because of removal of stamping fees to brokers !

John Abernethy
July 17, 2022

Thank you Rachel,

A well written submission noting the short time frame for the consultation period.

You rightly note the time frame that suggests a lack of intention to properly review the law.

It is interesting to note that in recent hybrid or capital notes issued by major banks to be listed on the ASX, that so called “advisor fees” were paid. These are “wholesale / sophisticated offers” raising billions.

So why allow advisor fees on wholesale offers but not on retail offers? They are really distribution fees cloaked as another name.

The acknowledgement of the fee is that there is a cost of distribution that the authorities accept in some circumstances but not in others.

Intermediaries play an important role in the capital markets. They play a role in both primary and secondary markets. The issue of a security ( primary) and the trading of it ( secondary) involve the same security.

The question is this. Should the issuer pay the cost of a transaction or distribution or should the purchaser/ investor?

Further - why are wholesale offers treated differently to retail offers?

The review needs to be conducted with a lot more diligence then is suggested by the current time frame set.

John Abernethy
Clime Capital Limited


Leave a Comment:



Conflicted selling fees are back, and it’s game on

Four ways to invest in the same fund and save money

ETFs are the Marvel of listed galaxies, even with star WAR


Most viewed in recent weeks

How to enjoy your retirement

Amid thousands of comments, tips include developing interests to keep occupied, planning in advance to have enough money, staying connected with friends and communities ... should you defer retirement or just do it?

Results from our retirement experiences survey

Retirement is a good experience if you plan for it and manage your time, but freedom from money worries is key. Many retirees enjoy managing their money but SMSFs are not for everyone. Each retirement is different.

A tonic for turbulent times: my nine tips for investing

Investing is often portrayed as unapproachably complex. Can it be distilled into nine tips? An economist with 35 years of experience through numerous market cycles and events has given it a shot.

Rival standard for savings and incomes in retirement

A new standard argues the majority of Australians will never achieve the ASFA 'comfortable' level of retirement savings and it amounts to 'fearmongering' by vested interests. If comfortable is aspirational, so be it.

Welcome to Firstlinks Edition 464 with weekend update

The 2021 Census reports that Millennials are now the largest generational group in Australia. While we are increasingly secular and culturally diverse, our differences are far more accepted than the way the US is heading. And please take our short retirement survey.

  • 30 June 2022

Dalio v Marks is common sense v uncommon sense

Billionaire fund manager standoff: Ray Dalio thinks investing is common sense and markets are simple, while Howard Marks says complex and convoluted 'second-level' thinking is needed for superior returns.

Latest Updates


The paradox of investment cycles

Now we're captivated by inflation and higher rates but only a year ago, investors were certain of the supremacy of US companies, the benign nature of inflation and the remoteness of tighter monetary policy.


Reporting Season will show cost control and pricing power

Companies have been slow to update guidance and we have yet to see the impact of inflation expectations in earnings and outlooks. Companies need to insulate costs from inflation while enjoying an uptick in revenue.


The early signals for August company earnings

Weaker share prices may have already discounted some bad news, but cost inflation is creating wide divergences inside and across sectors. Early results show some companies are strong enough to resist sector falls.


The compelling 20-year flight of SYD into private hands

In 2002, the share price of the company that became Sydney Airport (SYD) hit 80 cents from the $2 IPO price. After 20 years of astute investment driving revenue increases, it sold to private hands for $8.75 in 2022.

Investment strategies

Ethical investing responding to some short-term challenges

There are significant differences in the sector weightings of an ethical fund versus an index, and while this has caused some short-term headwinds recently, the tailwinds are expected to blow over the long term.

Investment strategies

If you are new to investing, avoid these 10 common mistakes

Many new investors make common mistakes while learning about markets. Losses are inevitable. Newbies should read more and develop a long-term focus while avoiding big mistakes and not aiming to be brilliant.

Investment strategies

RMBS today: rising rate-linked income with capital preservation

Lenders use Residential Mortgage-Backed Securities to finance mortgages and RMBS are available to retail investors through fund structures. They come with many layers of protection beyond movements in house prices. 



© 2022 Morningstar, Inc. All rights reserved.

The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.