In brief: The Australian Securities and Investments Commission is seeking feedback on proposals to help facilitate the increased use of electronic means of providing disclosure for financial products and services. The proposals include new class order relief to facilitate the increased use of multimedia product disclosure statements, and revised guidance in Regulatory Guide 221. Partner Marc Kemp (view CV) and Associate Simun Soljo report.


The proposals are set out in Consultation Paper 224: Facilitating electronic financial services disclosures. They draw on feedback the Australian Securities and Investment Commission (ASIC) has received from the financial services industry which suggests that issuers of financial products and providers of financial services are eager to increase the use of electronic means of disclosure in relation to financial products and services, and even to make electronic delivery the default method of providing disclosures. Increased use of electronic means of disclosure should reduce costs for providers and help meet the increasing consumer preference for this method of receiving information. ASIC notes feedback that Australian consumers are past the 'tipping point' where electronic disclosure is appropriate for most forms of disclosure and should be the default method.

However, it also notes that issuers and financial service providers face a number of obstacles to providing disclosure electronically, including existing requirements under the Corporations Act 2001 (Cth) and Corporations Regulations, as well as current ASIC guidance.

ASIC is considering amending the requirements through class order relief and providing updated guidance in Regulatory Guide 221 to better facilitate online disclosure. ASIC has issued a draft revised RG 221 for comment. It has not as yet released draft versions of the class order relief.


The key proposals are:

  • ASIC would amend the existing guidance in RG 221 to clarify that, if a financial services provider has an email address for a client, they do not need explicit consent from the client to use that email address to deliver disclosures electronically. Current ASIC guidance in RG 221 indicates that the provider must have obtained express consent from clients to deliver disclosures electronically. The relief would apply to PDSs, FSGs, SOAs, significant event disclosure and periodic statements. Although not strictly speaking disclosure in relation to financial products or services, it would be welcome news for responsible entities of registered schemes (and for ordinary companies) if ASIC were to apply the same approach to the delivery of notices of meetings which, under the Corporations Act, may only be delivered electronically if the member consents to receive notices in that way.
  • ASIC would issue class order relief to allow providers to publish disclosure electronically and then notify clients that the disclosure is available. Clients would still be able to elect to receive the disclosure by alternative means, including print and post, and delivery to an email address.
  • ASIC would facilitate the use of more innovative PDSs, such as interactive PDSs utilising multimedia, by providing the following class order relief:
    • Allowing providers to give a copy of any current PDS for a product, allowing providers to give a different printed PDS to the one that may be available online.
    • Providing relief from the prescriptive shorter PDS regime, as long as the PDS that is given communicates the same information.
    • Providing relief from requirements to include certain language in PDSs, such as the requirement to include the title of the PDS 'at or near the front of' the PDS. Providers may find it difficult to comply with these requirements in electronic or multimedia versions of PDSs.


The draft new version of RG 221 contains ASIC's proposed guidance in relation to the above changes.

While the proposed relief and clarified guidance should be welcomed by the industry, the consultation paper and draft RG 221 also note ASIC's concerns about the possible downside of the greater use of electronic disclosure and more innovative online PDSs – the 'opportunity for misunderstanding or distraction or important information being downplayed'. It therefore proposes to provide additional guidance in relation to these methods of disclosure. This includes the inclusion of a new good practice guidance principle that 'disclosures should not distract or divert clients from relevant information'.


ASIC is seeking feedback on the proposals by 16 January 2015.

Financial product issuers and service providers who are keen to increase the use of electronic disclosure in their business, but who have previously been hampered by the existing restrictions, should review the proposals and consider making submissions. We are happy to assist.

ASIC proposes to issue the updated RG 221 and new class orders in March 2015.