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ASIC Anti-Hawking obligations. Are you set up for sustained success?

Risk And Compliance

ASIC Anti-Hawking Obligations

A piece of new regulation under the spotlight is the Hawking Prohibition.

The ‘hawking prohibition’ as it is often referred to applies when a retail client (consumer – a person or small business) is:

  • offered a financial product during or because of unsolicited contact, or is
  • requested or invited to ask for, apply for, or purchase a financial product, “in the course of” or “because of” unsolicited contact

The new obligations are designed to further protect consumers from unsolicited offers of financial products, and from being pressured into buying products that they do not want or do not meet their needs.

So, what are the key things financial service providers should consider in preparing for these new obligations?

1. Upskilling

The issuer or seller of a financial product, as well as their agent or representative (the offeror), must understand what the changes are, when and how they apply. Training is key so that it can be demonstrated that they have a clear understanding of:

  • what constitutes “unsolicited”
  • when the hawking prohibition applies to advertising or the giving of information
  • what is required regarding consent – positive, voluntary and understood by the consumer, obtaining clarity of scope and keeping a record
  • when you should stop relying on consent
  • adherence to a consumer’s preferred method of contact
  • what constitutes a breach and the consequences, including the penalties involved and a consumer’s right to return a product and obtain a refund
  • exceptions and exemptions including certain products and their circumstances

2. Measuring and managing performance

It is also critical to ensure operational systems and supporting processes and resources are in place to efficiently manage and control the capture, storing, and reporting on the ongoing performance to anti-hawking obligations.

Enabling those on the frontline to comply, and those who are responsible for governance and oversight to regularly analyse and take corrective measures where needed, will be key to your sustained success.

Including KPIs in your performance management framework that aligns to each individual’s practices and behaviours to the hawking prohibition and your organisation’s code of conduct will help drive continued awareness and compliance.

3. How the prohibitions work as a part of a suite of new, more holistic obligations

The new hawking prohibition obligations work together with new product design and distribution, complaints handling and breach reporting obligations, all of which require embedded compliance plans and processes that monitor and address issues and adhere to specific mandated timeframes.

As the projects to put all this in place wind down, are those who will be accountable day-to-day equipped with the appropriate knowledge and supporting resources, tools and processes to enable them to successfully deliver on the new obligations?

We have also provided insight and assessments on the below topics:

Key Contacts

Michael Hartman

Senior Manager - Governance, Risk & Conduct

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Jodie Winks

Senior Consultant - Governance, Risk & Conduct

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