Point of sale disclosure should be provided upfront in clear, concise documents, according to a new report from a group of global regulators.
The Joint Forum, which includes banking, insurance, and securities regulators, released its final report on point of sale (POS) disclosure today, which examines various regulatory approaches to POS disclosure for investment and savings products across all three sectors. It also sets out eight recommendations for regulators and policymakers to use in developing or reforming their regulations.
One of those recommendations is that POS disclosure should be provided to consumers for free, before a sale is made. It also suggests that POS disclosure be written in plain language; that it should set out key information, such as a product’s features, costs, and risks; that disclosure should be standardized to facilitate comparisons; and, that there should be clear responsibilities for producing and delivering the disclosure.
“It is critically important for consumers across all financial sectors to receive adequate product disclosure at the point of sale. The final document recommends basic guidance for policymakers and supervisors to achieve this objective,” said Thomas Schmitz-Lippert, chairman of the Joint Forum and executive director, international policy at the German Federal Financial Supervisory Authority (BaFin). “The Joint Forum will continue to address issues in the area of consumer protection as they gain prominence in the global regulatory community.”
The Joint Forum includes representation from the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS), and the International Organization of Securities Commissions (IOSCO).