Australian Securities and Investments Commission (ASIC) has released new digital disclosure guidance and waivers for financial services product providers. The two instruments Removing Barriers to Electronic Disclosure (Instrument 2015/649) and Facilitating Electronic Delivery of Financial Services Disclosure (Instrument 2015/647) were the product of the responses received by ASIC to its November 2014 Consultation Paper 224 (Facilitating electronic financial services disclosures).
The effect of the two instruments is that Product Disclosure Statements (PDSs) and other financial service disclosure documents will be delivered to consumers digitally as the default option, unless the consumer opts out. The changes also enable Superannuation funds to meet their obligations to give PDSs and ongoing disclosure to a default fund member by using an e-mail address provided by the members employer.
While it should be noted that most financial service disclosure documents, including Financial Service Guides, Statements of Advice, PDSs and supplementary materials could in the past be delivered electronically, the default position was delivery by post or in person. Any form of electronic document delivery required prior consent from the client.
ASIC Commissioner John Price said the new measures are 'a response to changing consumer preferences' adding that 'ASIC wants industry to harness the opportunities of digitalisation and is encouraging the use of more engaging forms of communication using digital media - interactive, video and audio. This can boost consumer understanding of financial services and products'.
As well as enhancing consumer understanding via more interactive and engaging platforms such as smart phones and tablets, financial service providers will benefit from decrease costs associated with printing and mailing disclosure information as well as benefit from the convenience and reliability of dissemination of disclosure documents digitally.
The only notable disadvantage to these new measures stems from the well-recognised digital divide. Despite almost 15 million Australians now having home internet connection, those without will gain the least from these changes.
For further information on ASIC's guidance and waivers, please see ASIC Regulatory Guide 221 as well Instruments 2015/649 and 2015/647.