The Australian Securities and Investments Commission (ASIC) has issued class order [CO 04/1055], Information in a Financial Services Guide given in a time critical situation, to facilitate the provision of a Financial Services Guide (FSG) in a time critical situation under the Corporations Act 2001 (the Act).

The FSG is a key disclosure document under the Act that sets out the terms and basis under which a person will provide a financial service. It is provided to retail clients to help them make an informed decision on whether to acquire a financial service. In a time critical situation, such as during the sale of a financial service over the phone, it may not be reasonably practicable to provide an FSG before the financial service is provided. Instead, the Act permits a statement of certain key information to be given at the time, with the FSG given to the retail client within five days, or sooner if practicable, after the financial service is provided.

However, as the Act requires an FSG to be ‘up to date’ at the time it is given to the client, the information in the FSG provided later may contain different information to an FSG that would be given in normal circumstances.

To reduce the potential for a significantly increased compliance burden in having to provide customised information in an FSG, class order [CO 04/1055] provides that information in an FSG given in a time critical situation need only be up to date as at the time the earlier statement was given to a retail client.

‘The class order will in no way reduce the level of information provided to retail clients to help them decide whether to acquire a financial service’, ASIC’s Director of Legal and Technical Operations in Financial Services Regulation, Mr John Price said.

‘The time critical provisions of the Act may mean that FSGs need to contain tailored information that is known after the financial service is provided. The class order means that an FSG given after the provision of a financial service in a time critical case is the same as an FSG that is given before the provision of a financial service in normal cases’, Mr Price said.

A copy of the class order is available from the ASIC website at www.asic.gov.au/co or by calling ASIC’s Infoline on 1300 300 630.

End of release

Download a copy of Class Order [CO 04/1055] Information in a Financial Services Guide given in a time critical situation