Australian Financial Services Licensing (AFSL) Forum

#5470 Reply
Grant Holley
Grant Holley
Member

Hi David,

 

Thank you for your query.

 

With regards to your hypothetical, yes that would be a breach. Although their contact information is publicly accessible, that does not amount to an invitation to meet or call to sell a financial product.  However, this only applies to ‘retail clients’.

 

The hawking provisions for financial products, including life and general insurance products, are set out in s 992A of the Corporations Act.  As previously noted by ASIC, the application of the hawking provisions depends very much on the particular facts and circumstances of each case.

 

In general, a person must not offer financial products for issue or sale in the course of, or because of, an unsolicited meeting with another person, subject to the exceptions in the Act.

 

However, this does not apply where an offer is made to a ‘wholesale client’.  More information about the definition of a wholesale client may be found in our fact sheet: The Legal Basis of the Wholesale/Retail Client Distinction.

 

If the recipient of your telephone call is a retail client, the hawking provisions may be breached if you offer financial products because of a call that is an ‘unsolicited meeting’.  This could include a call to an advertised phone number or a number found the yellow pages where there was no positive, clear and informed request for the call.

 

You may find RG 38: The hawking prohibitions useful for further information.  There are other exceptions which may also apply.

 

You can contact our Financial Services Team if you would like further assistance with the hawking provisions.

 

Author: Grant Holley (Partner)

Co-contributor: Nicolette Tan (Law Clerk)

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