Herbert Smith Freehills advises AFMA in obtaining unfair contract terms relief from ASIC

The Herbert Smith Freehills Financial Services Regulatory team is pleased to have advised the Australian Financial Markets Association (AFMA) in obtaining welcome relief from the Australian Securities and Investments Commission (ASIC) in relation to the unfair contracts terms regime under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), which was recently expanded with effect from 9 November 2023.

The HSF team was led by partners Charlotte Henry and Alice Molan, senior associate David Curley and solicitor Felix Hu.

ASIC has adopted a no-action position as set out in its No-Action Letter. The No-Action Letter provides welcome certainty that ASIC does not intend to take regulatory action in connection with the unfair contract terms regime for a standard form contract that is:

• made with Institutional Investors; or
• an Industry Standard Form Contract.

The no-action position commences 2 February 2024.

The No-Action Letter strikes a pragmatic and sensible balance between the policy intent of protecting consumers and small businesses under the unfair contract terms regime with the need for regulatory certainty in connection with the provision of institutional financial services.

If you have any questions about what ASIC’s No-Action Letter means for your business, please get in touch with one of experts.