Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.8 - OTHER PROVISIONS RELATING TO CONDUCT ETC. CONNECTED WITH FINANCIAL PRODUCTS AND FINANCIAL SERVICES, OTHER THAN FINANCIAL PRODUCT DISCLOSURE  

Division 8 - Miscellaneous  

SECTION 992A   PROHIBITION ON HAWKING OF FINANCIAL PRODUCTS  

General prohibition

992A(1)    
A person must not offer a financial product for issue or sale to another person (the consumer ), or request or invite the consumer to ask or apply for a financial product or to purchase a financial product, if:

(a)    the consumer is a retail client; and

(b)    the offer, request or invitation is made in the course of, or because of, an unsolicited contact with the consumer.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).

Exceptions

992A(2)    
Subsection (1) does not apply to:

(a)    an offer, request or invitation made in the course of the giving of advice to the consumer by a person who is required under Division 2 of Part 7.7A to act in the best interests of the consumer in relation to the advice; or

(b)    

an offer of, or a request or invitation relating to, a financial product that is an add-on insurance product in relation to a product or service (the principal product or service ) that the consumer has indicated an intention to acquire from:

(i) the person making the offer, request or invitation; or

(ii) another person with whom that person has an arrangement that relates to the provision of add-on insurance products in relation to products or services that include the principal product or service; or

(c)    an offer, request or invitation of a kind prescribed by the regulations.

Note 1: A defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of the Criminal Code .

Note 2: Subdivision DA of Division 2 of Part 2 of the Australian Securities and Investments Commission Act 2001 deals with offers, requests or invitations relating to add-on insurance products.

Note 3: Subsection (1) also does not apply in relation to an offer that is eligible to be made under Division 1A of Part 7.12 (Employee share schemes): see subsection 1100ZC(8) .

992A(3)    

However, paragraph (2)(b) does not apply if:

(a)    making the offer, request or invitation is covered by any of sections 12DU to 12DY of the Australian Securities and Investments Commission Act 2001 ; or

(b)    the offer, request or invitation is made after the end of the period of 6 weeks beginning on the end of the first day of:

(i) the add-on insurance deferral period (within the meaning of section 12DP of that Act) in relation to the consumer acquiring, or entering into a commitment to acquire, the principal product or service; or

(ii) if there is no such add-on insurance deferral period - the add-on insurance pre-deferral period (within the meaning of that section).

Meaning of unsolicited contact

992A(4)    
Contact by a person with the consumer, in connection with a financial product, is unsolicited contact with the consumer in connection with the product if:

(a)    the contact is wholly or partly in one or more of the following forms:

(i) a telephone call;

(ii) a face-to-face meeting;

(iii) any other real-time interaction in the nature of a discussion or conversation; and

(b)    either:

(i) the consumer did not consent to the contact; or

(ii) if the consumer consented to the contact - the requirements of subsection (5) are not met.

992A(5)    

For the purposes of subparagraph (4)(b)(ii) , the requirements are:

(a)    in the case of an offer of that financial product for issue or sale to the consumer, either:

(i) the consent was a consent to the person contacting the consumer for the purpose of making the offer; or

(ii) offering to the consumer that financial product for issue or sale was reasonably within the scope of the consumer ' s consent; and

(b)    in the case of a request or invitation to the consumer to ask or apply for a financial product or to purchase a financial product, either:

(i) the consent was a consent to the person requesting or inviting the consumer to ask or apply for, or to purchase, that financial product; or

(ii) requesting or inviting the consumer to ask or apply for, or to purchase, that financial product was reasonably within the scope of the consumer ' s consent; and

(c)    the consumer gave the consent before the start of the contact; and

(d)    giving the consent was a positive and voluntary act of the consumer; and

(e)    the consent was clear, and a reasonable person would have understood that the consumer consented to the contact; and

(f)    if the consent indicated the form of contact that the consumer wants - the contact is in that form; and

(g)    the consent was given:

(i) within 6 weeks before the contact occurs; or

(ii) within such longer period (not exceeding 12 weeks) as the consumer agrees to, if the issue or sale of the financial product reasonably requires a period exceeding 6 weeks to allow for a medical examination; and

(h)    the consent was not withdrawn before the contact occurs.

For the purposes of this subsection, take into account any variations that the consumer makes to the consent before the contact occurs.

992A(6)    
The consumer may vary or withdraw the consent at any time. The variation or withdrawal may take any form, regardless of the form of the consent.

992A(7)    
To avoid doubt, advertising an offer, or publishing a statement about an offer, is not unsolicited contact if:

(a)    because of subsection 734(4) , (5) , (6) , (7) , (8) or (9) , the advertisement or publication does not contravene subsection 734(2) ; or

(b)    because of paragraphs 1018A(1)(c) to (e) , or because of subsection 1018A(3) , (4) or (5) , the advertisement or publication does not contravene subsection 1018A(1) ; or

(c)    because of paragraphs 1018A(2)(c) to (f) , or because of subsection 1018A(3) , (4) or (5) , the advertisement or publication does not contravene subsection 1018A(2) .

Application of this section to superannuation products

992A(8)    
This section, and regulations made for the purposes of this section, apply to financial products that are beneficial interests in a regulated superannuation fund as if each class of beneficial interest in the fund were a separate financial product.

Strict liability

992A(9)    
An offence based on subsection (1) is an offence of strict liability.