Australian Financial Services Licensing (AFSL) Forum

This topic contains 4 replies, has 4 voices, and was last updated by  hannahNeF 4 months ago.

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  • #4018 Reply

    licencefx
    Member

    Do the anti hawking provisions only apply to financial products or do they also cover financial services?

    #4079 Reply

    Hi there,

     

    Thanks for your query.

     

    The anti-hawking provisions are themselves deemed financial services laws.  Financial services licensees have an obligation to ensure that their representatives comply with financial services laws.  Therefore the representatives must be compliant with the hawking provisions.  The provisions are set out in sections 736, 992A and 992AA of the Corporations Act.  In general terms they stipulate that financial products should not be offered for issue or sale when an unsolicited meeting or telephone call has taken place with a retail client.

     

    The hawking provisions therefore function to control the promotion and sale of particular financial products, not financial services.

     

    You should also be aware of the general rules on making unsolicited telephone calls and charging for the supply of unsolicited financial services.

     

    If you have any further queries regarding the provisions, please do not hesitate to contact our office for assistance.

     

    Author: David Court

    Co-contributor: James Tselios

     

    #5441 Reply

    David Bolston

    I am still confused by this explanation to be honest. If i am an insurance broker and drive past a business for eg a cafe. If i call them on their advertised phone number and ask them if i could find out the renewal date as i would like to review their insurance and see if i can save them money/get a better deal ect…am i in breach ?

     

    The same process as in opening up the yellow pages book or yellow pages online ect.

     

    #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)

    #5550 Reply

    hannahNeF

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