ASIC Corporations (Generic Calculators) Instrument 2016/207 extends relief for providers of generic financial calculators from the requirement to hold an AFS licence with an advice authorisation or (where they currently hold a licence) relief from the conduct and disclosure requirements in Divisions 2,3 and 4 of Part 7.7 of the Corporations Act in relation to that advice.
UPDATE 16 May 2016: ASIC has released updated regulatory guidance on its relief for generic financial calculators in Section D of Guide 167 Licensing: Discretionary powers (RG 167).
UPDATE 27 December 2016: ASIC Corporations (Generic Calculators) Instrument 2016/207 was updated on 23 December 2016 to include an exemption for superannuation and retirement calculators until 1 July 2018 provided it discloses whether or not inflation is taken into account.
What is a generic financial calculator?
A generic financial calculator is a facility, device, table or other thing that:
- is used to make a general numerical calculation or find out the result of a numerical calculation about a financial product; and
- does not advertise or promote one or more specific financial products.
Conditions for relief
The relief only applies where the provider of a generic financial calculator takes reasonable steps to meet the following requirements:
a) if the financial calculator is an electronic facility or device, the user must be able to change all of the default assumptions (except statutory assumptions, such as taxation rates, which can either be fixed or able to be altered by the user) and perform a calculation using the changed assumptions;
b) the default assumptions must be reasonable;
c) the financial calculator must not advertise or promote a specific financial product;
d) the financial calculator must include clear and prominent statements about:
1. the purpose and limitations of the calculator;
2. the impact of any significant limitation of the financial calculator;
3. the assumptions;
4. where the calculator provides an estimate of an amount payable or receivable at a future time of 2 years or more- the present value of the estimate;
5. the fact that the financial calculator is not intended to be relied on for the purpose of making a decision about a particular financial product and that the user should consider obtaining advice from a AFS licensee before making any decisions;
e) the financial calculator must display to the user (including by request through a link to the information) an explanation of why the default assumptions are reasonable for working out the estimate;
f) if the financial calculator is an electronic facility or device – the calculator must not prevent the user from readily printing or electronically storing the result of the calculation;
g) the provider must keep a copy of the financial calculator for 7 years from when it is first made available; and
h) if the provider becomes aware, or should reasonably have become aware, of matters that give the provider reason to believe that they have failed, other than in an immaterial respect, to comply with a condition, the provider must notify ASIC in writing of details of the breach as soon as practicable, and in any case within 10 business days of becoming aware of the breach.
A person who relies on the exemption before 1 April 2017 does not have to comply with subparagraph (d)(4) provided that the person takes reasonable steps to ensure that the calculator displays to the user in the ordinary course of its use or has printed on it a clear and prominent statement specifying whether or not the estimate takes into account an assumed change in the cost of living between the time of the preparation of the estimate and the future time.
