Generic financial calculator exemption extended

ASIC Corporations (Amendment) Instrument 2018/40 has amended ASIC Corporations (Generic Calculators) Instrument 2016/207 to defer the commencement of the requirement for a generic financial calculator relating to superannuation and retirement to include the present value of future receipts and payments using an assumed rate of inflation of 2.5% until 1 July 2019.

ASIC Corporations (Generic Calculators) Instrument 2016/207 provides relief for providers of generic financial calculators from the requirement to hold an AFS licence with an advice authorisation or (where they currently hold a licence) relief from the conduct and disclosure requirements in Divisions 2,3 and 4 of Part 7.7 of the Corporations Act in relation to that advice.

ASIC has released regulatory guidance on its relief for generic financial calculators in Section D of Guide 167 Licensing: Discretionary powers (RG 167).

What is a generic financial calculator?
A generic financial calculator is a facility, device, table or other thing that:

  • is used to make a general numerical calculation or find out the result of a numerical calculation about a financial product; and
  • does not advertise or promote one or more specific financial products.

Conditions for relief
The relief only applies where the provider of a generic financial calculator takes reasonable steps to meet the following requirements:

a) if the financial calculator is an electronic facility or device, the user must be able to change all of the default assumptions (except statutory assumptions, such as taxation rates, which can either be fixed or able to be altered by the user) and perform a calculation using the changed assumptions;

b) the default assumptions must be reasonable;

c) the financial calculator must not advertise or promote a specific financial product;

d) the financial calculator must include clear and prominent statements about:

1. the purpose and limitations of the calculator;

2. the impact of any significant limitation of the financial calculator;

3. the assumptions;

4. where the calculator provides an estimate of an amount payable or receivable at a future time of 2 years or more- the present value of the estimate;

5. the fact that the financial calculator is not intended to be relied on for the purpose of making a decision about a particular financial product and that the user should consider obtaining advice from a AFS licensee before making any decisions;

e) the financial calculator must display to the user (including by request through a link to the information) an explanation of why the default assumptions are reasonable for working out the estimate;

f) if the financial calculator is an electronic facility or device – the calculator must not prevent the user from readily printing or electronically storing the result of the calculation;

g) the provider must keep a copy of the financial calculator for 7 years from when it is first made available; and

h) if the provider becomes aware, or should reasonably have become aware, of matters that give the provider reason to believe that they have failed, other than in an immaterial respect, to comply with a condition, the provider must notify ASIC in writing of details of the breach as soon as practicable, and in any case within 10 business days of becoming aware of the breach.

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