ASIC is consulting on proposed updates to its guidance on the prohibition on the hawking of financial products.
The commission says in a statement that this updated regulatory guide reflects the reforms to the anti-hawking regime under the Financial Sector Reform (Hayne Royal Commission Response) Act 2020, which is due to commence on 5 October 2021.
It says that in its final report the Banking Royal Commission stated reforming the hawking prohibition was necessary to protect consumers from being sold financial products they did not need or want.
ASIC Commissioner Danielle Press says these reforms “…strengthen and consolidate the three existing hawking prohibitions into a single prohibition covering all financial products”.
“The reforms take a technology neutral approach, meaning the ban applies to all forms of real-time communication. The prohibition incorporates for the first time a definition of unsolicited contact, requiring that consent given by a consumer be positive, voluntary and clear.”
Press adds that these reforms will “…give consumers greater control over the circumstances in which they are offered products, and prevent consumers being approached with unwanted products on cold-calls or through other unsolicited contacts. They will also prevent businesses relying indefinitely on consents from consumers.”
…the guidance gives additional clarity on how the changes may affect commercial practices, systems and processes…
She says that the ASIC guidance gives additional clarity on how the changes may affect commercial practices, systems and processes. “This will help industry prepare for compliance with the new regime once it commences.”
ASIC is seeking public comment on the draft guidance and interested stakeholders have until 17 August to provide feedback on CP 346 (the consultation paper).
It says it will publish its final guidance in September 2021, ahead of the revised hawking prohibition commencing on 5 October 2021.
As background ASIC says that key features of the reforms include:
- Application to all financial products (as defined in the Corporations Act 2001)
- A definition of ‘unsolicited contact’ that extends the prohibition from in-person meetings and telephone calls, to any ‘real-time interaction in the nature of a conversation or discussion’ without consumer consent
- That consumer consent must be positive, voluntary, clear and capable of being reasonably understood
- That consent only be valid for six weeks from the date it is given and may be withdrawn by the consumer at any time
- A statutory right of return for consumers who have been hawked a product
Click here to access the consultation paper (CP 346).