media release

IR 05-64 ASIC releases policy on calculators

Published

ASIC has released its policy on the regulation of generic financial calculators and issued Class Order [CO 05/1122] Relief for providers of generic calculators to give effect to the policy.

Generic financial calculators are tools that make numerical calculations relating to financial products, but that do not advertise or promote a specific financial product. Generally these tools allow consumers to input various facts to calculate the estimated value of total superannuation, savings or investments or the level of contributions required to reach a particular goal.

ASIC's relief will ease the licensing, conduct and disclosure requirements for providers of generic financial calculators and promote the provision of high-quality information to consumers through calculators. This relief means that providers of generic financial calculators will not require an Australian Financial Services (AFS) licence with an advice authorisation or, if already licensed, will not need to meet the conduct and disclosure requirements in Part 7.7 of the Corporations Act 2001 (the Act) subject to certain conditions. The conditions of the relief are set out in the attachment to this release.

‘Financial calculators can help consumers to inform themselves about financial products and services, particularly as most calculators are on-line and easily accessible. Our policy and relief will make it easier for industry to provide these calculators by electronic and other means,’ said ASIC Executive Director of Regulation, Mr Malcolm Rodgers.

‘However, ASIC is also aware that calculators can mislead consumers if they are not designed responsibly. So we've imposed a number of conditions on this relief designed to ensure calculators produce good quality and reliable information.’

The release of this policy and class order follows extensive consultation with industry bodies. In August 2005, ASIC released a consultation paper, ‘Online Calculators’, and received a number of submissions in response.

ASIC is still considering its policy regarding other types of calculators such as product-specific calculators (ie calculators that do advertise or promote specific financial products) and risk-profilers. It may be necessary for ASIC to consult further with industry before finalising its policy.

ASIC's policy on the regulation of generic financial calculators is set out in section F of Policy Statement 167 Licensing: discretionary powers [PS 167].

End of release

Attachment to [IR 05-64]: ASIC releases a new policy on the regulation of generic financial calculators

[CO 05/1122] provides licensing or disclosure and conduct relief for providers of financial calculators that meet certain minimum conditions. The relief only applies where:

  • the calculator does not advertise or promote a specific financial product;
  • if the calculator is an electronic facility or device, the calculator enables a person using it to alter the default assumptions applied by the calculator (other than a statutory assumption that reflects a rate or amount of fixed by legislation) and performs a calculation using the changed assumptions;
  • the default assumptions applied by the calculator are, unless changed by the user, reasonable;
  • the calculator will display to the user in the ordinary course of its use or have printed on it all of the following:
    • a clear and prominent statement about the purpose and limitations of the calculator;
    • a clear and prominent explanation of why the default assumptions, including any statutory assumption, are reasonable;
    • a clear and prominent explanation of the impact of any significant limitation of the calculator;
    • where the calculator estimates an amount payable at a future time—a clear and prominent statement specifying whether or not the estimate takes into account an assumed change in the cost of living between the time of the preparation of the estimate and the future time; and
    • a clear and prominent statement to the effect that the calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product and that the user should consider obtaining advice from a financial services licensee before making any financial decisions;
  • if the calculator is an electronic facility or device—the calculator does not prevent the user from readily printing or electronically storing the estimate; and
  • the provider keeps a copy of the calculator for 7 years from when it is first made available.

[CO 05/1122] also revokes Class Order [CO 05/611] Relief for providers of superannuation calculators. [CO 05/611] provided licensing or conduct and disclosure relief to providers of generic superannuation calculators. Providers of generic superannuation calculators can now rely on [CO 05/1122].

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