On Friday 6 August 2021, Treasury registered the long-awaited anti-hawking regulations in relation to financial services, which can be found here.
The Financial Sector Reform (Hayne Royal Commission Response) (Hawking of Financial Products) Regulations 2021 (Cth) operate to exempt certain conduct from the proposed anti-hawking prohibition coming into effect on 5 October 2021. Some key exemptions for the industry include:
- Renewals: making an offer to renew a financial product that is substantially similar to a financial product held by the customer within 30 days of which the offer is made. This provision is an important one and will enable the insurance industry in particular to continue to assist in preventing underinsurance/insurance policy lapses, which result from a range of unintended circumstances (e.g. due to non-payment of premium or a failure to renew);
- Basic banking products: making an offer, request or invitation in relation to a basic banking product in the course of any contact initiated by a customer (e.g. where the customer calls inbound or walks into a branch of their own initiative); and
- Term deposits: making an offer, request or invitation in relation to a term deposit with a maximum term of 5 years, where the customer can withdraw their funds with up to 31 days’ notice to the bank, in the course of any contact initiated by a customer (e.g. where the customer calls inbound or walks into a branch of their own initiative).
These exemptions in relation to basic banking and term deposit products are also, in our view, sensible given there is widespread financial literacy on how these relatively simple and low risk products operate.
Along with these exemptions, there are a series of other exemptions available, including in the context of listed securities, managed investment schemes and litigation funding arrangements.