ASIC Bans Unsolicited Sale of Financial Products

This will affect cold calling and other unsolicited contact tactics used by firms.

The Australian Securities and Exchange Commission (ASIC) published updated regulatory guidance on the prohibition of hawking financial products that will ban the retail sale of unsolicited financial products on Thursday.

According to the new rules, financial instrument providers must receive clear consent from the customer with the signing of a contract. In addition, it added that consent must be positive, voluntary and clear.

“These changes put in place fairness protections, so consumers are not sold products they don’t want or don’t need. The restrictions mean consumer needs will be central to how firms offer products,” said ASIC Deputy Chair Karen Chester.

These reforms were introduced with recommendations of the Royal Commission on misconduct in the banking, superannuation and financial services industry. The purpose of them is to put a curb on rising cold calls and other unsolicited contacts.

The new regulatory guidelines will be introduced under the Financial Sector Reform (Hayne Royal Commission Response) Act 2020, which will come into effect on October 5.