ASIC has published Regulatory Guide 221 Facilitating digital financial services disclosure (RG 221) and two new legislative instruments to clarify when financial services providers can make electronic financial services disclosure to clients.

While the Corporations Act expressly permits the electronic delivery of financial services disclosures, the Act is inconsistent in its terminology; in some sections it says documents can be ‘given’ if they are sent to an electronic address or fax number ‘nominated’ by the client or the client’s agent, and in other sections it says disclosures may be notified or given to a client in ‘electronic’ form or may be sent ‘electronically’. Other provisions say disclosures may alternatively be ‘made available in any way agreed to’ by a client or their agent.

RG 221 sets out ASIC’s views on the requirements when documents can be sent by email or made available for download.

In particular ASIC says that if a client has provided their email and postal address as contact information as part of an application, the provider could deliver disclosures for that product to either address even if the client did not provide express consent to use their email address for the purpose of delivery of disclosures.

ASIC summarises its position as follows:

When disclosures may be delivered digitally in full to an electronic address (e.g. an email address):

• if the client has provided an email address (or other electronic address) as part of their contact details; or
• for superannuation fund trustees, the trustee can rely on ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647 for disclosures to ‘default members’ (i.e. where the member’s email address has been provided by the member’s employer).

When disclosures may be delivered using any digital method (e.g. a digital message with a hyperlink to the disclosure):

• if the client has agreed (orally or in writing);
• if the client has not agreed, the provider can rely on ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647, which involves making the disclosure available digitally and notifying the client that the disclosure is available (the provider must first give the client the opportunity to opt out of this method); or
• If it is specifically permitted by the Corporations Act (e.g. for annual superannuation information and confirmations of transactions).

The Appendix contains a table summarising disclosure delivery requirements for common disclosure documents including PDS, FSG, SOA, periodic statements, confirmation of transactions and disclosure of material changes and significant events.

The new instruments are:

• ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015 (15-647) which creates a new method of digital delivery enabling financial services providers to publish a disclosure digitally and notify the client that it is available. This Instrument also enables superannuation fund trustees to meet their obligation to give a PDS and ongoing disclosures to a default fund member by using an email address provided by the member’s employer.
• ASIC Corporations (Removing Barriers to Electronic Disclosure) Instrument 2015 (15-649) which facilitates the innovative use of digital media for PDSs, FSGs and SOAs.

Let me know if you need a hand with reviewing your processes to see if RG 221 can help you be more efficient by taking advantage of technology to deliver information to your clients.