The Joint Forum which consists of the Basel Committee on Banking Supervision, the International Organization of Securities Commissions and the International Association of Insurance Supervisors has published its final report on point of sale (POS) disclosure in the insurance, banking and securities sectors, following its consultation in August 2013.
The report identifies and assesses differences and gaps in regulatory approaches to POS disclosure for investment and savings products across the insurance, banking and securities sectors, and considers whether the approaches need to be further aligned across sectors. It sets out eight recommendations, for use mainly by policymakers and supervisors to assist them in considering, developing or modifying their POS disclosure regulations. The recommendations include the following:
- jurisdictions should consider implementing a concise written or electronic POS disclosure document for the product sample identified in the report, taking into account the jurisdiction’s regulatory regime;
- the POS disclosure document should be provided to consumers free of charge, before time of purchase and should be clear, fair and not misleading;
- a jurisdiction considering POS disclosure should consider requiring that a POS disclosure document disclose key characteristics including costs, risks and financial benefits or other features of a given product and any underlying or referenced assets, investments or indices, irrespective of the financial sector from which the products are derived;
- the POS disclosure document should be clear, fair, not misleading and written in a plain language designed to be understandable by the consumer;
- the POS disclosures should include the same type of information to facilitate comparison of competing products;
- the POS disclosure document should be concise, set out key information about a product and may include, as appropriate, links or refer to other information. It should make clear that it does not provide exhaustive information;
- allocation of responsibility for preparing, making available and/or delivering the POS disclosure document should be clearly established and the POS disclosure document should identify which entity is responsible for its content; and
- a jurisdiction considering POS disclosure should consider how to use its capabilities and powers to implement these POS recommendations, taking into account the jurisdiction’s regulatory regime.