ASIC green lights electronic PDS
Financial services companies will have greater scope to deliver product disclosure statements (PDS) and other similar documents to consumers electronically, following the release of new guidance for the Australian Securities and Investments Commission (ASIC).
The regulator has issued a new regulatory guide 221 (RG221) in which it provided more detailed specifics about the circumstances under which financial services firms can use electronic delivery.
Commenting on the changes, ASIC commissioner, John Price said the changes meant PDS and other financial services disclosure documents will be delivered to consumers digitally as the default option, unless the consumer opts out.
"This will reduce the costs of printing and mailing for businesses while preserving choice for those consumers who wish to receive paper," he said.
The ASIC regulatory guide makes it clear that consumer consent sits at the heart of how documentation ought to be delivered, but also makes clear that financial services companies can pursue a strategy predicating on allowing clients to opt out of receiving electronic communications.
However ASIC makes clear that it is not mandating electronic delivery as a default position.
"We take a technologically neutral approach to disclosures and do not mandate the delivery of disclosures digitally," its regulatory guide said.
"It is for providers to determine the method of delivering disclosures that best suits their clients or their products and that will not expose those clients to undue risk of scams and fraud. For example, a margin-lending product might work particularly well online because clients are likely to be monitoring their investments online," it said.
For his part, Price noted the degree to which consumers were choosing to receive information digitally.
"‘The measures announced today respond to changing consumer preferences, with ever increasing numbers of people transacting digitally. Almost 15 million Australians now have a home internet connection and 68 per cent of those online are using three or more devices to access the internet," he said.
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