The Australian Securities and Investments Commission (ASIC) has announced a public consultation into electronic disclosure, inviting companies with heavy reliance on electronic communications to provide their requirements to allow regulatory rules to be framed and implemented more efficiently.
The paper, titled ‘Facilitating Electronic Financial Services and Disclosures’ welcomes financial market participants to use “more innovative formats for Product Disclosure Statements,” and several times refers to ASIC’s desired goal of “content of disclosures evolving in new ways that are more engaging for consumers.”
Retail foreign exchange brokers stand to be the most affected by any regulatory changes with regards to electronic disclosure, because such firms usually conduct >90% of all communications online.
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The regulator points out that it doesn’t necessarily matter which communication method firms choose to disclose, it only matters whether it’s suitable. In the report, ASIC states, “We take a technologically neutral approach to disclosures and do not mandate the delivery of disclosures electronically.” Adding, “Providers need to determine the method of delivering disclosures that best suits their clients and which will not expose those clients to undue risk of scams and fraud. For example, a margin-lending product might work well online because clients are likely to be monitoring their investments online.”
For firms that specialize in financial services delivered online, ASIC’s advice is clear: “We think that one way to make disclosure more effective is by encouraging and facilitating the use of electronic disclosures.” In the speculator driven retail trading arena the future is only digital.
ASIC Commissioner, John Price said, ‘ASIC is focused on making disclosure more effective and meaningful for consumers of financial services. We want to encourage more innovative ways of delivering important information presented in a way that consumers can understand and act on.”
Mr. Price added, “At the same time, we believe electronic disclosure could reduce costs for providers and enable them to better align their disclosure with consumer preferences.”