ASIC revises disclosure proposals

The Australian Securities and Investments Commission (ASIC) has revised its proposals for increased online disclosure for financial services information, following dissatisfaction among some submissions with the level of disclosure proposed by the regulator in its consultation paper.

A number of submissions in response to ASIC’s first consultation paper believed their approach to disclosure was too prescriptive, and expressed concerns that their proposals would impose conditions that were more restrictive than the current disclosure laws.

One of the proposals suggested allowing a provider to deliver financial services disclosures by sending an email to retail clients notifying them that the disclosure was available via a website or hyperlink. The proposal was meant to offer conditional relief over uncertainty with regards to whether existing laws allowed online disclosure via a hyperlink.

However, some respondents suggested that the proposed method of relief was already allowed under the current law, and the proposed conditions were more onerous than the law itself. Conditional relief would actually hamper and restrict the use of online disclosure by providers, the submissions said.

ASIC also proposed that providers allow retail clients to change their minds about receiving online disclosures, and that if any disclosures are undelivered, providers should take reasonable steps to deliver it.

Some respondents believe that such measures should not apply to online products that are sold on the basis that the buyer reads the disclosure and monitors their investments online.

Many of the submissions also said it would be difficult to determine if an email was undelivered to a retail client, and the onus should be on the client to inform the provider if they haven’t received an online disclosure.

Under the current law, a provider needs to obtain a retail client’s express agreement before delivering online financial services disclosure.

The regulator has invited submissions in response to the revised proposals, which it has made public in a new consultation paper.

“Most submissions saw the potential for online disclosure to make disclosure more interactive, innovative and user-friendly for retail clients … however, some respondents thought that ASIC should go further in facilitating online disclosure of financial services information,” ASIC said.