Using influencers in the digital ageBY LYNDA DOWLING | VOLUME 19, ISSUE 1This report contained a new term to some financial services firms, namely "digital engagement practices" (DEPs) which ASIC described as being: • Gamified incentives • Social trading (e.g. influencer marketing, investor education material and copy trading-replicating trading of more experienced investors) • Trading apps (the design of such apps, websites and marketing materials). Main regulatory obligations Those operating in the financial services industry know they must comply with the 'core' obligations under section 912A of the Corporations Act 2001 (Corporations Act) and Corporations Regulations 2001, being: • The obligation to provide financial services honestly, efficiently, and fairly (section 912A(1)(a) of the Corporations Act) • Complying with the conditions of your Australian financial services (AFS) licence (section 912A(1)(b) of the Corporations Act) • Complying with the financial services laws (section 912A(1)(c) of the Corporations Act). There is also an obligation to comply with the Australian Securities and Investments Commission Act 2001 (ASIC Act). When firms receive a section 912C notice, it means ASIC is trying to ascertain if the AFS licensee has breached any of the core obligations. Key prohibitions under the ASIC Act Whereas the following key prohibitions apply to all financial services firms, this paper focuses on these from an influencer marketing perspective: • Provision of unauthorised financial services • Inducement and referral selling • Misleading and deceptive conduct • Engaging in unconscionable conduct. These are further explained in the next few sections. Providing unauthorised financial services The two key regulatory items influencers need to ensure they do not breach are: • Being seen as providing unauthorised financial product advice, which is a recommendation or statement of opinion intended to influence a person in making a decision to purchase financial products or not • Dealing by arranging-arranging for a person to deal in a financial product (buying/selling) is a financial service. Get articles like this delivered to your email - Sign up for the free weekly newsletter ![]() More Articles |
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