Hawking Provisions Guide
The securities regulator has published further guidance to protect customers from being contacted about financial products without their consent.
This week Australian Securities and Investment Commissions (ASIC) published regulatory guide on Hawking provisions to help regulated entities meet their compliance obligations which should kick into effect next month.
The publication of this regulatory guide comes just a little over month since the period for the consultation Hawking provisions closed on the 17 August.
ASIC Commissioner Karen Chester said in formal statement this week, “The new hawking prohibition addresses long held concerns about poor consumer outcomes from unsolicited sales of financial products.”
This is one of six major reforms that the ASIC-regulated entities will need to comply with from next month and follows recommendations from the royal commission into banking and financial services which called for the prohibition of the hawking of superannuation and insurance products.
This was also published the same that the Australian Prudential Regulation Authority (APRA) published their prudential guide on insurance in superannuation.
“ASIC’s 2018 review of unsolicited life insurance sales calls revealed poor sales conduct and poor consumer outcomes, with 40% of consumers feeling under pressure to buy a product. This led to recent criminal proceedings for the hawking of life insurance, and to date ASIC has helped secure over $250 million in consumer remediation for consumer credit insurance and life insurance,” Chester added.
In their statement this week ASIC indicated that they would take measured approach in the ‘initial stages’ of reforms as long as they are satisfied that regulated can demonstrate that are trying to comply with these obligations.
When ASIC announced the roll out of the six reforms last month the chair of the securities and investments regulator Joe Longo said much the same thing:
“We therefore recognise there will be a period of transition as industry finalises implementation of additional compliance measures, and ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply.”
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