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Clarity needed on anti-hawking ‘offer’ definition
There is a contradiction between the anti-hawking regulatory guide (RG) and the consultation paper and the corporate watchdog needs to clarify on what constitutes as an offer, an association believes.
The Australian Institute of Superannuation Trustees (AIST) said in a submission to the Australian Securities and Investments Commission (ASIC) hawking prohibition regime that while the RG said the advertising/providing information was not prohibited if it was not in real time and no offer was made, the paper stated that advertising/providing information was not prohibited as long as it was not in real time or no offer was made.
“We seek for this to be clarified and believe that the RG should be clear that information can continue to be provided in real time without being subject to hawking prohibitions unless an offer is being made,” AIST said.
“Clarity is also sought on what constitutes an offer, invitation or request in a superannuation context. For example, most superannuation fund product disclosure statements (PDSs) include an application form (given it must be accompanied by a PDS).
“Furthermore, it would be beneficial to see more guidance on the new concept of 'request or invite the consumer to ask or apply for a financial product or to purchase a financial product’. For example, what constitutes a ‘request’ or ‘invite’ is not defined in the Corporations Act; and although s992(A) of the act outlines ‘eight consent requirements’, these do not address the lack of clarity on what constitutes a ‘request’ or ‘invite’.”
The AIST said the explanatory memorandum to the act had some explanation but it was not clear.
It pointed to the example given which said: “Gary is leaving the information session Ros hands him an application form for the Very Good MySuper product and asks him to fill it out. Ros has breached the hawking rules because Gary did not consent to being invited to apply for a superannuation product before Ros gave him the application form and asked him to fill it out”.
The AIST said: “It is unclear if merely handing out an application from was the ‘invite’ or ‘request’ or was it because he was asked to fill it out.
“Further guidance and clarification will assist licensees in meeting their obligations.”
The AIST submission also noted that ASIC should give funds an extra 12 months to make system changes to reflect new requirements for recording consent.
“Updating systems to be able to record consent for six weeks is exceedingly challenging. Currently, systems that record consent generally show simple yes or no,” it said.
“These may or may not be connected by the system to the date on which the consent was collected (even though it may be in system logs). System changes to automatically ‘turn off’ consent after six weeks will be costly.”
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