The Australian Securities and Investments Commission (ASIC) has released an information sheet focussing on financial products and services provided online and the influencer who promote them. The fact sheet applies to social media influencers, and licensees who use these influencers.
ASIC Commissioner Cathie Armour said:
The way investors access information is changing. It is crucial that influencers who discuss financial products and services online comply with the financial services laws. If they don’t, they risk substantial penalties and put investors at risk.
The information sheet - INFO 269 - highlights activities where fininfluencers may contravene the law if they are unaware of legal requirements relying upon the examples of financial product advice; dealing by arranging; and misleading and deceptive conduct.
INFO 269 also explains issues for finfluencers to consider including whether they require an Australian Financial Services licence (AFSL) to carry on their business activities; keeping up to date with regulatory advice and guidance; and doing their own due diligence on the people who are paying them.
INFO 269 also reminds AFS licensees who use finfluencers to do their own due diligence; implement appropriate risk management strategies, systems and monitoring processes; implement sufficient compliance resourcing to monitor the influencers they use; and to consider their design and distribution obligations.
This is a timely reminder by ASIC that the corporate enforcement regime under the Corporations Act and ASIC Act will extend to influencers for their potential breaches of misleading and deceptive representations or unlicensed advice.
In a follow-on meeting held between ASIC and finfluencers, the latter were surprised at the aggressive position adopted by ASIC, which was presented as being far tougher than in INFO 269, leaving many attendees "shocked" at the comments from ASIC which included no grandfathering of past posts which could be in breach. Finfluencers who attended commented to the AFR that they may shut down their accounts as a result.