ASIC is consulting on proposed updates to its guidance on the prohibition on the hawking of financial products.
ASIC’s 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.
These reforms flow from two recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. In its final report, the Financial Services Royal Commission stated reforming the hawking prohibition was necessary to protect consumers from being sold financial products they did not need or want.
Announcing the consultation, ASIC Commissioner Danielle Press said, ‘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’.
‘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.’
‘ASIC’s 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ASIC seeks public comment on the draft guidance. All interested stakeholders have until 17 August to provide feedback on CP 346.
ASIC will publish its final guidance in September 2021, ahead of the revised hawking prohibition commencing on 5 October 2021.