ASIC Grants Deposit Product Issuers Relief from Interest Rate and Termination Value Disclosure

Key Takeaways

• ASIC Instrument 2025/509 exempts deposit product issuers from disclosing specific interest rates in Product Disclosure Statements and termination values in periodic statements, provided alternative access methods are offered.
• The relief, effective the day after registration and repealed on 1 October 2030, reduces disclosure burden but requires issuers to implement compliant alternative disclosure mechanisms.

Deep Dive

This instrument provides targeted relief under the Corporations Act 2001 for issuers of deposit products, modifying two specific disclosure obligations: the requirement to state interest rates in Product Disclosure Statements (PDS) and the requirement to include termination values in periodic statements. Rather than eliminating transparency obligations entirely, ASIC has replaced a static disclosure requirement with a conditional, access-based alternative, reflecting the reality that deposit interest rates often change frequently and a point-in-time PDS disclosure may quickly become inaccurate or misleading.

The key operative change is in Section 6: issuers no longer need to print the current interest rate in the PDS itself, provided they take "reasonable steps" to (a) clearly and prominently disclose how customers can find the current rate, and (b) provide a free, simple, and convenient channel for customers to access that rate (e.g., website, phone line, app). Section 7 separately exempts periodic statements from including termination values, a narrower but still meaningful relief from paragraph 1017D(5)(b) requirements.

From a timeline perspective, the instrument commences the day after registration on the Federal Register of Legislative Instruments and will sunset automatically on 1 October 2030, giving firms a defined five-year relief window rather than a permanent carve-out. Compliance teams should treat this as a temporary accommodation and build in a review checkpoint well before the 2030 repeal date to avoid a compliance gap when the exemption lapses.

Recommended actions for compliance professionals include: (1) reviewing current PDS and periodic statement templates to identify where interest rate and termination value disclosures can be streamlined under this exemption; (2) establishing or validating the "reasonable steps" taken to direct customers to current rate information, ensuring the access method is genuinely free and convenient (not buried in fine print); (3) documenting the rationale and evidentiary basis for relying on the exemption, since ASIC's relief is conditional, not automatic; and (4) updating internal disclosure governance frameworks and customer communication scripts accordingly.

The risk implications are moderate: while this reduces documentation burden and potential for PDS inaccuracies from rate fluctuations, it shifts risk toward operational execution — firms must ensure the alternative rate-disclosure channel is reliable, accessible, and tested, as a failure here could itself trigger a disclosure breach or consumer complaint. Firms should also monitor customer understanding and complaint trends to confirm the simplified disclosure approach is not creating confusion or detriment, particularly for vulnerable customers less able to access digital rate-lookup tools.

Source: Australian Securities and Investments Commission