Regulators in Australia are looking to make it easier for financial firms to deliver disclosure electronically, by allowing them to make online disclosure the default delivery option.
The Australian Securities and Investments Commission (ASIC) published a consultation paper Friday that proposes a series of regulatory changes designed to facilitate electronic disclosure delivery, and to encourage the use of more innovative product disclosure. The ASIC says that the goal is to enhance investor engagement with disclosure.
“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,” said ASIC commissioner, John Price.
“At the same time, we believe electronic disclosure could reduce costs for providers and enable them to better align their disclosure with consumer preferences,” he said.
Among other things, the ASIC is proposing to revise its rules to make it clear that, if a financial firm has an email address for a client, they do not need consent to use that address to deliver disclosures electronically. “An approach to consent that differentiates between electronic addresses and postal addresses is no longer warranted, particularly given increased usage of the internet and digital technology, and consumer acceptance that the provision of an email address to a business usually means that it will be used for the delivery of information from that business,” the paper says.
Additionally, the paper notes that while, “Behavioural economics and our own research tells us that people tend to accept defaults … the current default to printed disclosure may be detrimental to consumers, many of whom may prefer electronic disclosure, and also to product issuers for whom electronic disclosure is less costly.”
As a result, it’s also proposing to provide relief that would allow firms to publish disclosures electronically and then notify the client that the disclosure is available, without first seeking the client’s express agreement to receive disclosures that way.
It would require firms to allow clients to still choose to receive that disclosure in hard copy. “Allowing the default method of delivery to be set to electronic disclosure in this way will not take away the option of having printed disclosures delivered for those consumers who do prefer this option, but will nudge those who we would expect to prefer this form of disclosure into receiving disclosures electronically,” it says.
The paper acknowledges that different consumers prefer to receive communications in different ways. “Consequently, although the proposal intends to allow providers to shift the default method of disclosure to electronic, it still requires providers to make other methods of disclosure, such as print and post disclosure or direct delivery to an email address, available to consumers,” it says.
Additionally, the ASIC is proposing to provide relief from certain disclosure content requirements to enable firms “to use more innovative [product disclosure statements (PDSs)] (including interactive PDSs) … provided the more innovative PDS contains the same information required by the shorter PDS regime.”
The proposals are out for comment until Jan. 16, 2015.