SIMPLY supplying a superannuation calculator to customers will not automatically require a business to take an Australian Financial Services licence.
However, a licence or authorisation is more likely to be required if the calculator is intended to, or might reasonably be regarded as intended to, encourage consumers to make a decision about a particular financial product or strategy.
The Australian Securities and Investments Commission is of the view that superannuation calculators can be provided without a licence or authorisation, particularly where all of the following are satisfied:
- The calculator allows the consumer to alter all "default settings" for the various assumptions;
- Any default settings are based on industry-wide rather than fund-specific information;
- The calculator is accompanied by a clear explanation of its purpose and limitations including an explanation of the assumptions – including the limit of the assumptions – and a clear statement that the calculator is intended to illustrate the broad impact of consumer choices and is not a prediction of a consumer’s final superannuation benefit;
- The calculator is accompanied by a clear statement to the effect that it is not intended to be relied on for the purposes of making a decision in relation to a financial product and that consumers should consider obtaining advice from an AFS licensee before making any financial decisions; and
- The calculator forms part of, or is linked to, other educational material and is distinct from any fund’s promotional or marketing material.
ASIC executive director of financial services Ian Johnston said the commission was aware of concerns that had been expressed that an AFS licence or authorisation would be required for the provision for a superannuation calculator.
"This concern is based on the views that the provision of a calculator involves the giving of financial product advice," he said.
"We are issuing this guidance to clarify that we don’t think a licence or authorisation will always be required.
"The need for a licence or authorisation will always depend on a consideration of all the circumstances."
Debt factoring gets relief
AN Australian Securities and Investments Commission class order has provided debt factoring arrangements with relief from the requirement to hold an Australian Financial Services licence and the product disclosure and hawking provisions of Chapter 7 of the Corporations Act.
Under the terms of the class order, if the other party to a factoring arrangement is a retail client, the relief granted to a person who is, or proposes to be, the purchaser of debt obligations under the terms of the factoring arrangement is conditional.
To comply with the terms of the class order, such a person must:
- Ensure the terms and conditions of the factoring arrangement are given in writing to the retail client before the factoring arrangement is entered into; and
- Establish and maintain an internal dispute resolution systems that complies with the Australian standard on complaint handling AS4269-1995 that covers complaints made by retail clients against the person in connection with a factoring arrangement.
A factoring arrangement is defined under the class order to mean an arrangement under which a person acquires debt obligations, such as receivables, at a discount.
Advice or dealing activities in relation to debt factoring arrangements have the potential to be caught by the licensing, conduct and disclosure requirements of the act as they may technically fall within the broad definition of ‘derivative’ in section 761D.
ASIC considers it appropriate to grant relief to persons who provide financial services in respect of debt factoring arrangements, in light of the unintended application of the broad ‘derivative’ definition in the act.