Until now, the Corporations Act (the Act) has required financial services providers to send disclosure documents (such as financial services guides (FSGs) or product disclosure statements (PDSs)) in paper form unless they held express consent from the consumer for digital communications. 

ASIC has recognised the need to remove regulatory barriers to providing financial services disclosures electronically. Updated Regulatory Guide 221 Facilitating digital financial services disclosures acknowledges that this will be more convenient for consumers and is expected to result in significant cost savings for industry.

Where a consumer has provided their email and postal address as part of their application, providers can deliver disclosures for that product to either address, even where the consumer has not provided express consent to receive electronic disclosures.

‘Publish and notify’

This method comprises sending consumers a notification that disclosures are, or will be, available digitally. The notification can be sent by any number of methods, including email, SMS, mobile app notification or social media notification. The notification should advise the form of the disclosure, for example via an app.

Consumers have seven days from the date electronic communication is first used to opt out and require paper disclosure. If they do not opt out within the first seven days, all future disclosures can be delivered using the same method, provided that the notifications can be retrieved or stored. 

Any disclosures containing personal financial information should be adequately secured, for example by password protection.

Businesses which use a particular form of digital disclosure can still use any other methods permitted by the Act to deliver disclosures, for example by emailing the complete document.

The new rules apply to:

  • FSGs;
  • statements of advice (SOAs);
  • PDSs;
  • ongoing disclosure of material changes and significant events;
  • periodic statements; and
  • information statements for Commonwealth government securities.

When are disclosures deemed received?

Until now, providers had to be reasonably satisfied that the consumer or their agent received the disclosures – and this was seen as an additional barrier to digital disclosures. The relief provided in ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647 means that industry is not required to track whether the disclosures have been accessed by affected consumers.

However, if you become aware that a consumer has not received the disclosure (eg you receive an email bounce back), you need to make reasonable attempts to contact the consumer by other means to give them the disclosure.

What if you want to change your method of delivery?

If you want to change your method of providing disclosures, eg from paper to email, you will need to notify consumers using your existing method of communication before making this change. As always, you should provide an opportunity to opt-out.

What if products and services are only available digitally?

New products can be offered on the basis that disclosure documents will not be made available in a printed form, as long as consumers are made aware that they will receive communications digitally only. 

If you seek to shift a currently paper based product or service to being fully digital, you must first obtain the consent of all consumers holding that product or service.

Important considerations when providing disclosures digitally

  • You should ensure that the delivery method does not unreasonably expose the consumer to security risks by adequately protecting any personal financial information.
  • The consumer should be easily able to identify what information is part of the disclosure and what is outside the scope of the disclosure.
  • The disclosure should be readily navigable; in other words, the consumer should be able to easily access those parts of the disclosure which are most important to them.
  • You need to ensure that appropriate prominence is given to each aspect of the product that the consumer needs to understand before purchasing.
  • Consumers should be able to keep a copy of the disclosure for future access – for example, by saving a digital copy.
  • You must maintain copies of all versions of disclosure documents and maintain records regarding when each version was available.
  • You need to comply with other relevant legislation, such as the Spam Act and the Privacy Act.

What if we have different versions of a PDS?

You can now have more than one version of a disclosure document for a financial product; for example, a printed PDS and a digital version.

Innovative disclosure methods and documents

ASIC is open to granting individual relief to facilitate methods of disclosure not covered above (where those methods are consistent with ASIC’s Good Disclosure Principles). Applications for individual relief can also be made in relation to innovative forms of PDSs, SOAs and FSGs.