ASIC consults on electronic disclosure

In a new consultation paper, the corporate regulator called for feedback from advisers and other stakeholders on the proposal to create greater scope for electronic communications.

Currently, the default method of providing disclosure is printing and posting the documents, unless clients agree otherwise, the paper stated.

Under the changes, product providers would have the option to publish disclosures online and then alert clients to the document’s availability.

In addition, product providers would not need the client’s consent to send disclosures to their email address.

“This will allow providers to change their default method of delivery for disclosures from printed to electronic, should they choose to do so,” the paper stated.

ASIC said changing the default would be favourable both to clients and product providers.

“Behavioural economics and our own research tells us that people tend to accept defaults, either as a result of inertia, or because of the implied approval of those choices by the body setting the default,” the paper stated.

“As a consequence, 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 than printing and posting.”

In the proposal, ASIC called for feedback on their suggested models from financial product and services providers, consumers and their representatives.