ASIC Publishes Guidance on Prohibiting Hawking Financial Products

The Australian Securities and Investments Commission (ASIC) today published updated regulatory guidance on the prohibition of hawking financial products, in line with the reforms to the anti-hawking regime under the Financial Sector Reform Act 2020, which commence on 5 October 2021.

ASIC has previously highlighted the harm and poor consumer outcomes that can occur when consumers are offered products in situations where they are not engaged or have not considered a purchase. These reforms are designed to tackle these harms arising from consumers being approached with unwanted products through cold-calls or other unsolicited contact.

Under the prohibition a person must not offer a financial product to a retail client in the course of or because of unsolicited, real-time contact. A consumer must consent to being contacted, and that consent must be positive, voluntary and clear.

“These changes put in place fairness protections, so consumers are not sold products they don’t want or don’t need. The restrictions mean consumer needs will be central to how firms offer products,”ASIC Deputy Chair Karen Chester said.”Under the new laws, ASIC will be better able to tackle poor conduct by firms where consumers are pressured into products that are not right for them.”

Earlier, ASIC has updated its licensing and registration activities​, reporting that it approved 339 new Australian financial services (AFS) between 1 July 2020 to 30 June 2021.