Internet sites that foster discussion and comment on financial services products are likely to find themselves being more closely scrutinised by the Australian Securities and Investments Commission (ASIC).
The regulator has released a discussion paper in which it proposes to update its approach to so-called Internet Discussion Sites (IDS) and will make clear whether it believes the operators of such sites will need an Australian Financial Services Licence (AFSL).
In releasing the discussion paper, ASIC made clear that it did not propose to grant IDS operators relief from the financial services licensing and disclosure regimes, meaning that operators would need to hold an AFSL unless a pre-existing exemption applied to them.
ASIC has fleshed out its position in the discussion paper, pointing out that whether the operator of an IDS is providing financial product advice will depend on their involvement in the postings.
“For example, an operator who is very much involved in the content of the IDS by making postings may be providing financial product advice,” the discussion paper said.
“If this is the case, we consider that the operator’s conduct in operating the IDS and providing financial product advice may constitute the carrying on of a financial services business.”
It said that operators who did not post comments containing financial product advice themselves, but who authorised or arranged for others to post such comments might also require a licence.
It said this was because authorising or arranging for a thing to be done was generally treated in the same way as actually doing it, under the Corporations Act.
