Regulation of online calculators

ASIC has released a consultation paper which discusses the licensing and regulatory issues associated with online calculators.

The paper contains proposals for 3 types of calculators:
(a) generic calculators;
(b) product-specific calculators; and
(c) risk profilers.

ASIC distinguishes them as follows:

"Generic calculators
1.2 Generic calculators are:
(a) mathematical tools (i.e. they only produce numerical results)
(b) that do not produce results relating to one or more specific financial products.

1.3 Examples of generic calculators include the following (but only where they do not relate to specific financial products):
(a) savings calculators;
(b) managed investment calculators; and
(c) life insurance calculators.

1.4 Typically, generic calculators help the user calculate:
(a) the estimated value of total savings or investments at a future point in time; and/or
(b) the estimated level of saving, investment or life insurance cover required to achieve a particular financial goal.

Product-specific calculators
1.5 Product-specific calculators are:
(a) mathematical tools (i.e. they only produce numerical results)
(b) that produce results relating to one or more specific financial products.

1.6 Examples of product-specific calculators include:
(a) calculators that are connected to promotional material for a named financial product (e.g. by including a link to the Product Disclosure Statement for the product or a link to ‘Apply now’ on the calculator’s results page);
(b) superannuation or managed investment calculators that allow the user to select, perform calculations on, and compare the estimated performance of named financial products (or investment strategies within a product);
(c) life insurance calculators that enable the user to calculate the sum insured (i.e. the amount of insurance they should take out) as part of the process of applying for, or obtaining a quote for, a specific life insurance product; and
(d) warrant calculators that enable the user to calculate and compare the projected income and taxation for specific instalment warrant products.

Risk profilers
1.7 Risk profilers are tools that, based on the user’s answers to a series of questions about investment preferences, assess the user’s attitude to risk.

1.8 Risk profilers are generally not mathematical tools (i.e. they do not produce numerical results). Although the result may be derived using mathematical formulae (e.g. by assigning the user’s answers scores and using the total to produce a result), the results themselves are not numerical (e.g. the output is that the client has a risk weighting, such as ‘conservative’ or ‘aggressive’)."

Comments are due by 23 September.

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Announcing 2005 Financial Services Forum

Network Law's forum this year will discuss "Changes in Control of Mutuals: A Practical Guide".

It will deal with takeovers, demutualisation, mergers, winding up and defences for mutual financial institutions.

It will be held on Friday 7 October in Sydney.

For more information download the brochure.

We are still confirming a keynote speaker. Details will be announced as soon as possible.

Book now.

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Privacy Commissioner investigates credit providers

The Privacy Commissioner, Karen Curtis, has released case notes regarding personal information handled by credit providers.

The cases include:

OPC v Banking Institution [2005] PrivCmrA 11 : the Office conducted an own motion investigation (OMI) into the automated disclosure, by a banking institution, of personal information following the use of an incorrect facsimile number.

Following the Office's OMI, the banking institution stopped using a facsimile-based service to receive customers' personal information, and introduced a secure on-line service and permanently decommissioned the fax number. The other organisation involved also confirmed that it blocked all faxes other than those from designated numbers.

Q v Credit Provider B [2005] PrivCmrA 16: it was alleged that credit provider B had re-listed an overdue account on an individual's consumer credit information file after it had been purged from their record.

Following the Commissioner's investigation credit provider B acknowledged that it had made an error and that the listing should be removed. Credit provider B contacted the credit reporting agency and instructed the credit reporting agency to remove the listing immediately.

S v Credit Provider [2005] PrivCmrA 18:the complainant alleged that a commercial credit default was listed on their consumer credit information file and an enquiry was listed without a loan application.

Following an investigation by the Office, both the enquiry and the payment default were removed from the complainant's credit file. The Commissioner sought from the credit provider written evidence that its staff were provided with Privacy Act training. The credit provider also provided a written apology to the complainant.

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New Features on Network Law

In an ongoing effort to provide better services to you, in response to your feedback we have implemented the following changes:

• Username/password: you are now able to change your own username and password;
• instruction sheets for new mortgages, new discharges and new stampings have been improved and you are now able to print them;
• Auto-emails can now be sent to multiple contacts in your organisation.
  

If you have any queries about these changes, please contact your local Network Law representative.

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