Why Referencing the Regulator in Marketing Material is Risky Business

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Rules

Entities that operate in the financial services and credit industries will often reference ASIC or use the ASIC logo in marketing materials in attempt to legitimise their business in the eyes of prospective clients. However, use of the ASIC logo is not permitted and references to ASIC can often overstate ASIC’s extent of oversight.

References to ASIC and use of the ASIC logo in marketing material is especially popular when targeting overseas clients. Globally, Australia is seen as one of the leading jurisdictions when it comes to regulation of the financial services and credit industries. As a result, entities seek to promote themselves as “ASIC regulated”. However when referencing ASIC in marketing material, entities should ensure they do not promote themselves as being “supervised” or “approved” by ASIC or stating that ASIC has oversight of the entity.

Further, ASIC has made it very clear on their website that the ASIC logo is not to be used without their express permission. For further information on this please visit: Copyright and linking to our websites.

Similarly, the Australian Financial Complaints Authority (“AFCA)” has guidelines outlining the use of their name and logo. Permitted uses include using the AFCA name, contact details, and logo solely for the purposes of advising clients and consumers of their right to contact AFCA to make a complaint about a financial services or credit licensee. However, AFCA members are not permitted to use the AFCA name or logo to imply that AFCA endorses their entity, products or services in any general communications or promotional material.

ASIC actively monitors the marketing and promotional material of financial services and credit industry participants and is often quick to correspond with entities who incorrectly reference or use ASIC’s logo. In severe circumstances (i.e. repeat offenders), ASIC may take enforcement action against the entity.

In 2017 Huntley Management Limited (“Huntley”) was ordered by the Federal Court of Australia to pay a fine of $50,000 for false and misleading advertising. Huntley’s marketing material stated that its investment projects were “approved by the Australian Securities and Investments Commission” which was untrue. Huntley made these statements on its website over a five-year period as well as publishing two advertisements in newspapers.

ASIC’s media release stated, “ASIC encourages financial services providers to regularly review their website content and consider ASIC’s guidance on promoting financial products and advice services in Regulatory Guide 234: Advertising financial products and advice services including credit: Good practice guidance.”

In 2011, ASIC issued a warning to all credit licence holders after a credit licensee voluntarily agreed to stop using ASIC’s name and logo on its website. ASIC’s concerns in this case centred around the potential for consumers to be misled into believing that the credit services provided were somehow endorsed or approved by ASIC.

In 2006, a financial adviser displaying the ASIC name and logo in their shopfront window, was also issued with a warning. The adviser voluntarily agreed to remove the display and include a notice in the shopfront and a newspaper advertisement to correct any misleading impressions.  ASIC noted that in this case, the adviser had complied with ASIC’s requests, however noted that it would not hesitate to take court action against entities who unlawfully use it’s name or logo.

Next Steps

Entities providing financial and credit services should take the opportunity to review the content of their website and any marketing material which has been recently issued or is still available, including:

  • Checking any references to ASIC do not imply that ASIC approves, endorses, supervises or has oversight of the entity’s operations;
  • Ensuring the ASIC logo does not appear on their website or marketing material;
  • Ensuring there is no false or misleading content included in the material; and
  • Reviewing their website and marketing material content against the requirements in RG234, the Corporations Act, the National Consumer Credit Protection Act and the ASIC Act.

The requirements in relation to marketing material extend to content published on social media. Entities should ensure all staff are aware of the legislation and regulation regarding marketing and promotional material and receive regular training in relation to these issues.

Further reading

Further resources

Sophie Grace can assist you in meeting your compliance requirements including conducting marketing reviews. If you require assistance in reviewing your marketing material please contact us.

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