ASIC’s new regime allows financial services providers to elect to deliver financial services disclosure documents to clients digitally unless the client opts out. The reforms should result in time and costs savings for financial services providers and make the information available to clients in a more timely, convenient, interactive and easier to understand manner.
Following recent consultation, ASIC has released an updated >Regulatory Guide 221 Facilitating digital financial services disclosure and a number of relief instruments which together remove some of the barriers to delivering financial services disclosure digitally and encourage innovative communication of information about financial products and services.
The new regime applies to FSGs, SOAs and PDSs as well as certain other disclosure documents.
Financial services providers may determine the digital delivery method that best suits their clients and their products, and that will not expose their clients to undue risk of scams and fraud.
New digital disclosure regime
Previously, financial services disclosure documents were required to be delivered in paper form unless the client had provided express agreement to digital disclosure.
Under the new regime, disclosures may be delivered:
- electronically to an electronic address (eg an email address) if the client provides such address as part of their contact details; or
- using any digital method (eg a digital message with a hyperlink to the disclosure) provided that the client has agreed (orally or in writing) or if the client has not agreed, by using a “publish and notify” method.
Under the “publish and notify” method, the provider must notify clients that disclosures are, or will be, available digitally and advise the form of disclosure the provider intends to use. The client must then be given at least 7 days to “opt out” of this publish and notify method. The notification may be provided at the same time as the opt-out notice but the provider will not satisfy its obligation to deliver the disclosure until the opt-out period has expired. If the client does not opt out within the 7 day period, the provider may then provide all future disclosures digitally, provided that when the provider publishes a disclosure, it notifies the client (including details of how to access the disclosure) and the notifications are able to be retrieved or stored. Where the disclosure contains personal information, the provider should ensure that the information is adequately secured such as by password protection.
RG 221 also provides some good practice guidance for digital disclosure to help ensure that clients continue to receive clear, concise and effective information when disclosures are delivered digitally and that consumer protections are retained in the digital environment.
Encouraging further innovation
ASIC has indicated that it does not intend to restrict the way in which disclosures can be delivered digitally and encourages providers to explore more innovative forms of disclosure. It is open to granting individual relief for other methods of disclosure not described above provided that they are consistent with ASIC’s Good Disclosure Principles.
ASIC has also provided relief to remove potential barriers to the use of more innovative forms of FSGs, SOAs and PDSs as well as specific guidance on the use of more innovative digital disclosures.
- ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647; and
- ASIC Corporations (Removing Barriers to Electronic Disclosure) Instrument 2015/649.