Australia: Part I - "Adviser" Duties

Future of Financial Advice
Last Updated: 9 June 2014
Article by Cristean Yazbeck
This article is part of a series: Click Part I - "Adviser" Duties for the previous article.

1.1 " Best interests duty "

What is the best interests duty?

Section 961B(1) of the Corporations Act states, in relation to an advice provider giving personal advice, as follows:

" (1) The provider must act in the best interests of the [retail] client in relation to the [personal] advice. "

This is generally referred to as the best interests duty.

Section 961B(2) states as follows:

  1. The provider satisfies the duty in subsection (1), if the provider proves that the provider has done each of the following:
    1. identified the objectives, financial situation and needs of the client that were disclosed to the provider by the client through in structions;
    2. identified:
      1. the subject matter of the advice that has been sought by the client (whether explicitly or implicitly); and
      2. the objectives, financial situation and needs of the client that would reasonably be considered as relevant to advice sought on that subject matter (the client's relevant circumstances);
    1. where it was reasonably apparent that information relating to the client's relevant circumstances was incomplete or inaccurate, made reasonable inquiries to obtain complete and accurate information;
    2. assessed whether the provider has the expertise required to provide the client advice on the subject matter sought and, if not, declined to provide the advice;
    3. if, in considering the subject matter of the advice sought, it would be reasonable to consider recommending a financial product:
      1. conducted a reasonable investigation into the financial products that might achieve those of the objectives and meet those of the needs of the client that would reasonably be considered as relevant to advice on that subject matter; and
      2. assessed the information gathered in the investigation;
    1. based all judgements in advising the client on the client's relevant circumstances;
    2. taken any other step that, at the time the advice is provided, would reasonably be regarded as being in the best interests of the client, given the client's relevant circumstances."

This is often referred to as the safe harbour provision, about which more will be said below.

How does the best interests duty work?

Section 961B(1) is the operative provision, obliging the p rovider of personal advice to a retail client to act in the client ' s best interests. This will usually be an individual financial adviser who is either an AFS licensee in their own right, or an authorised representative of an AFS licensee. However, under FOFA, it can also in clude employee representatives.

The Corporations Act expressly provides that a licensee must ensure that their representatives comply with the best interests duty 2 , and may be liable for civil penalties if their representatives breach the requirements 3 . A c ourt may also order that a client be compensated by a licensee for loss or damage 4

Let's go back to the " safe harbour " provision. That provision prescribes a series of steps for the provider to take, which if proven, will deem the provider to have met the best interests duty. That is not to say that the prescribed steps in section 9 61B(2) are the only way a provider can meet the best interests duty; rather, it is one way.

The benefit of the " safe harbour " provision is that it provides an express statut ory regime through which the best interests duty can be met.

Following a Coalition announcement in December 2013, it is proposed to remove sub - section (g) of th e "safe harbour" provision, which should give advisers some certainty around the best interests duty . It is also proposed to amend the best interests duty to explicitly allow for " scaled advice " . This proposal will allow clients and advisors to agree on the scope of the advice whilst ensuring that the advice remains appropriate .

" Best interests " is itself not defined in the Corporations Act. However, section 9 61E does provide that:

" It would reasonably be regarded as in the best interests of the client to take a step, if a person with a reasonable level of expertise in the subject matter of the advice that has been sought by the client, exercising care and objectively assessing the client's relevant circumstances, would regard it as in the best interests of the client, given the client's relevant circumstances, to take that step . "

What else does the best interests duty cover?

The Corporations Act also prescribes that advice providers also have an obligation to:

  • only provide appropriate advice5; and
  • prioritise the interests of the client where there is a conflict with their own interests, or those of one of their related parties6.

Issues for consideration

The best interests duty raises a number of issues which AFS licensees and their representatives will need to consider:

  1. How has the best interests duty changed existing obligations when giving personal advice?
  2. What does the best interests duty mean for Approved Product Lists (APLs), in terms of both use and selection?
  3. What does the best interests duty mean for existing client advice templates (eg Statements of Advice (SoAs); fact finders etc...)?

Each of these questions will be addressed below. In doing so, we will also survey ASIC's position in detail.

How has the best interests duty changed existing obligation s when giving personal advice?

In theory, not much should change, however it is instructive to note that the best interests duty (like much of FOFA) has its genesis in regulatory concerns that retail clients would have been better off had they not obtaine d financial advice in relation to investments in failed ventures such as Trio, Storm Financial and Westpoint. The concerns largely stem from the position that retail clients were given personal advice that was not in their best interests; rather, the advic e was dictated by other conflicting motives .

These principles appear to govern ASIC's approach to the best interests duty. In particular, ASIC states in its updated Regulatory Guide 175 ( RG 175 ) that : 7

" When assessing whether an advice provider has complied with the best interests duty, we will consider whether a reasonable advice provider would believe that the client is likely to be in a better position if the client follows the advice . "

Much of the commentary in RG 175 centres around this basic p roposition. Therefore, it is instructive to use this as a starting point.

Following from the above, ASIC has indicated that it will assess:

" the position the client would have been in if they did not follow the advice, which is to be assessed at the time the advice is provided ". 8

In particular, ASIC:

" will not examine investment performance retrospectively, with the benefit of hindsight ". 9

ASIC gives the example of a subsequent fall in unit prices in a case where the advice (at the time it was provided) was appropriate to the client: in that case, the best interests duty was met.

To use ASIC's wording: 10

" The best interests duty is concerned w ith what occurred at the time the advice was provided ".

ASIC gives another example as follows, which is instructive : 11

" A client holds a portfolio of products through a platform. They have told their advice provider that they believe their current platfor m is providing an acceptable service and they can understand the reporting provided but they are concerned about the fees they are paying for using the platform.
The advice provider discusses the reports with the client and believes that the client under stands them, even though they are presented in a complex manner.
The advice provider recommends that the client switch to another platform because the format of its consolidated reports on the client's holdings will be easier for the client to follow. Co mpared with the fees the client is currently paying, the fees for this other platform are higher by 0.1% of the value of the client's assets administered by the platform.

Commentary

In this scenario, we would not consider that a reasonable advice provider would believe that the client is likely to be in a better position if the client follows the advice. This is because the client was concerned about costs but was switched to a platfo rm with higher costs.
The advice provider has not complied with the best interests duty . "

The above example may seem simplistic, however when coupled with the st arting proposition that ASIC, in assessing whether an advice provider has complied with the best interests duty, will consider whether a reasonable advice provider would believe that the client is likely to be in a better position if the client follows the advice, it becomes clear that the key deliverable to discharging the best interests duty, i s a proper understanding of the client's objectives and motives for seeking advice and the transactions proposed in relation thereto. The advice provider, after having undertaken reasonable investigations, must then assess whether the advice he/she is abou t to give, is likely to leave the client in a better position, having regard to the client's objectives/motives.

Elaborating on the above example, if the client has expressed concerns about fees, and is given advice about a product which – whilst having b etter features – is actually more expensive than the incumbent product, ASIC will consider the adviser to have fallen foul of the best interests duty.

In some respects, this may lead to unintended outcomes, in that the new product better may objectively b e better suited to the client, but by sheer virtue of the fact that the new product is more expensive, the client is seen by the regulator as being " worse off " : thus, the best interests duty is not met.

On a literal interpretation of RG 175, the best inte rests duty would still not be met even if the new product generated significantly higher returns than the client's incumbent product.

On the flip side, and disappointingly, ASIC's position probably leaves open the conclusion that the best interests duty i s met in a case where a client invested in a cheaper option simply because fees were his/her primary concern, but with the result that the client was left worse off overall in terms of net financial returns.

What this appears to make clear, in any event, is that the best interests duty (at least in ASIC's view) is all about properly scoping from the outset what the client's objectives and motives are for seeking personal advice. Putting it another way, the advice needs to be consistent with the subject mat ter of the advice sought by the client, and their particular requirements. This should not be difficult to achieve if the initial client dialogue/engagement is properly scoped and documented.

It could almost be said that the significant majority of the ob ligations dictated by the best interests duty, are imposed as part of the initial client engagement/dialogue. If these aspects are properly defined and scoped from the outset, then it is likely that the best interests duty is going to be met, because the a dviser will understand what the client seeks. If not done properly at the outset, then it is equally likely that there is very little that the adviser can do going forward to cause the best interests duty to be met.

What does the best interests duty mean for APLs, in terms of both use and selection?

Use

ASIC provides some useful guidance in relation to the use of APLs.

What is clear from RG 175 is that being limited to products within an existing APL of itself does not infringe the best interests duty. ASIC's focus appears to be whether a reasonable advice provider would believe that the client is likely to be in a better position if the client follows the advice.

Specifically, ASIC comments that : 12

" The best interests duty does not prevent or require the use of approved product lists.
In some cases, an advice provider can conduct a reasonable investigation into financial products under section 9 61B(2)(e) by investigating the products on their AFS licensee's approved product list.
In other cases, an advice provider will need to investigate and consider a product that is not on their AFS licensee's approved product list to show that they have acted in the best interests of the client when providing them with personal advice - for example:
  1. if the client's existing products are not on the approved product list of the advice provider's licensee and these products might be able to meet the client's relevant circumstances;
  2. if an approved product list used by an advice provider is restricted to one class of product and there are products that are not in that class that would better meet the client's relevant circumstances, considering the subject matter of the advice sought by the client; or
  3. if the client requests the advice provider to consider a specified financial product that is not on the approved product list of the advice provider's licensee."

The above is very instructive, and consistent with ASIC's proposition that, in assessing whether an advice provider ha s complied with the best interests duty, ASIC will consider whether a reasonable advice provider would believe that the client is likely to be in a better position if the client follows the advice.

To the extent that product - specific advice is sought, the adviser, in discharging his/her duty to undertake reasonable investigations, will more than likely need to consider that particular product or class of products, even if they are not on the adviser's APL.

If, however, product - specific advice is not sough t, and based on what the adviser understands as being the client's requirements/objectives/motives (after making reasonable enquiries), considers that products on the adviser's APL will meet those requirements/objectives/motives and leave the client better off, the best interests duty will likely be met if advice is given based on the existing APL.

What the best interests duty therefore means, going forward, is that an adviser cannot simply narrow the scope of his/her advice to products on the APL if it is reasonably clear that the client seeks advice on products (or product types) not covered by the APL. Also, if it is clear that the client's requirements/objectives/motives cannot be satisfied by products on the APL (for example, the client seeks lower fee s and all the products on the APL are more expensive than the client's existing product(s)), advice should not be given in relation to products on the APL: in this latter case, the adviser would be required to undertake reasonable investigations into other suitable products if he/she is going to provide personal advice to that client and in relation to that client's requirements/objectives/motives.

Selection

What the above also makes clear, is that the best interests duty itself does not speak to the APL product selection process. From ASIC's perspective, the best interests duty is all about identifying the client's requirements/objectives/motives, and assessing whether the client is likely to be better off: if the existing APL can be utilised to answer t hose tests in the affirmative, then the existing APL can be used; otherwise, the advice provider will need to undertake reasonable investigations of products not on the APL.

Commercially, product providers may (and should) look to tailor their APLs based on an identification of clients' needs over time, but this is not dictated by the best interests duty.

What does the best interests duty mean for existing client advice templates (eg SoAs; fact finders etc...)?

As indicated above, the significant majority of the obligations dictated by the best interests duty appear to be imposed as part of the initial client engagement/dialogue. If these aspects are properly defined and scoped from the outset, then it is likely that the best intere sts duty is going to be met, because the adviser will understand what the client seeks. If not done properly at the outset, then it is equally likely that there is very little that the adviser can do going forward to cause the best interests duty to be met .

The most transparent way of establishing compliance with the best interests duty is to meet the " safe harbour " requirements discussed above. As mentioned, section 9 61B(2) of the Corporations Act prescribes a series of steps for the provider can take, wh ich if proven, will deem the provider to have met the best interests duty. Ultimately, then, advice templates should be written having regard to these prescribed requirements, and it should be manifestly evident from the advice documents that the advice pr ovider has had regard to the " safe harbour " requirements when providing his/her advice.

1.2 " Opt - in " and fee disclosure

What is "opt - in"?

Section 962K of the Corporations Act provides that an AFS licensee , or its representative, who enters into an " ongoing fe e arrangement " with a retail client must give the client a written renewal notice every 2 years which requires the client to " opt in " to renew that fee arrangement.

If the retail client does not respond to the renewal notice, or opts out at a later time, then the ongoing fee arrangement terminates. Once the arrangement is terminated, the fee recipient must cease charging the ongoing fee.

The licensee/representative which enters into the ongoing fee arrangement with the retail client is referred to as the fee recipient . All express obligations under " opt - in " fall on the fee recipient. Accordingly, it is imperative that the fee recipient be properly identified, especially where payments flow between entities.

Before I discuss " opt - in " in full, I should note that the Coalition proposes to remove it in full, following its announcement in December 2013. Again, the Coalition's proposals will be the subject of a separate paper when they are legislated.

What is an "ongoing fee arrangement"?

An " ongoing fee arrang ement " is defined in section 9 62A as an arrangement under which an AFS licensee , or its representative, gives personal advice to a retail client and where fees are to be paid for more than 12 months.

It is a condition of the ongoing fee arrangement that t he client may terminate the arrangement at any time. 13

Section 962D provides that the opt - in requirements apply to an ongoing fee arrangement entered into on or after 1 July 2013 where the client has not been provided with personal advice before that date by the adviser. This is the " grandfathering " provision.

Is there an exemption from "opt - in"?

Section 962CA introduces a new power for ASIC to exempt a person or class of persons from complying with the opt - in requirements if ASIC is satisfied that the person, or class of persons, is bound by a code of conduct approved by ASIC.

What is the renewal notice?

For those arrangements to which " opt - in " applies (ie they are not grandfathered), the fee recipient must, within a period of 30 days beginning on the " renewal notice day " , give the retail client a renewal notice 14 . For the ongoing fee arrangement to continue, the client must notify the fee recipient in writing, within the " renewal period " , that the arrangement is to continue.

For the purposes of the above:

  • The "renewal notice day" is – for the first renewal of the arrangement – the second anniversary of the day on which the arrangement was entered into 15 . Given that the renewal notice does not need to be given in relation to grandfathered arrangements , and hence can only apply in relation to ongoing fee arrangements commencing on or after 1 July 2013 for the AFS licensee, this means that no renewal notice day for any of the AFS licensee's retail clients will be earlier than 1 July 2015.
  • For subsequent renewals, the renewal notice day will be the second anniversary of the last day on which the arrangement was previously renewed.

  • The "renewal period" is 30 days beginning on the day on which the renewal notice is given by the fee recipient.16

If the client notifies the fee recipient in writing within the renewal period that they do not wish to renew the arrangement, the arrangement terminates on the day the notification is given. 17

If the client does not notify the fee recipient in writing within the renewa l period that they wish to renew the arrangement, the arrangement terminates 30 days after the end of the renewal period 18 . This effectively allows the ongoing fee arrangement to continue for 90 days after the second anniversary date.

Section 962K(2) outli nes the content requirements for a renewal notice.

What else needs to be given to retail clients?

Even where:

  • an "ongoing fee arrangement" is grandfathered (meaning there is no obligation to give a renewal notice); and/or
  • the fee recipient is exempt from having to comply with the "opt - in "requirements,

the fee recipient still needs to give the retail client a " fee disclosure statement " . 19

Timing of fee disclosure statements

Section 962G of the Corporations Act provides that the fee disclosure statement needs to be given before the end of a period of 30 days beginning on the " disclosure day " for the ongoing fee arrangement.

The " disclosure day " is one of the following: 20

  • if no fee disclosure statement has previously been given – the anniversary of the day on which the arrangement was entered into; or
  • otherwise – 12 months from the period to which the previous fee disclosure statement related.

Section 962H(2) outlines the conte nt requirements for a fee disclosure statement.

Issues for consideration

The "o pt - in " regime raises a number of issues . Some immediate questions include the following :

Does there need to be a connection between the ongoing fee and the personal advice provided?

The ongoing fee does not have to be connected to the personal advice provided by the fee recipient.

In view of the above, does this mean that any ongoing fees charged by a fee recipient (including product fees), are subject to " opt - in " ?

A numb er of concerns were raised by the Industry that the drafting of the " ongoing fee arrangement " provisions was such that most fees charged by an AFS licensee (including product fees) were caught, meaning that the retail client needed to " opt - in " to paying, s ay, account fees or management fees.

Section 962A(5) of the Corporations Act excludes from an " ongoing fee arrangement " those arrangements which " [relate] to a fee that is prescribed as a product fee " .

Regulation 7.7A.10(2) of the Corporations Regulatio ns 2001 (Cth) provides that, for the purposes of s ection 962A(5):

" a product fee is a fee that the issuer of a financial product charges a retail client in relation to the administration of a financial product issued to the client . "

On the basis of the above, fees such as product fees, account - keeping fees, management fees, administration fees etc... charged by the product issuer , will not be caught. This is in keeping with the legislative intent of the " opt - in " regime, which was to tar get ongoing adviser service fees.

What else is exempt from being an "ongoing fee"?

Section 962A(3) of the Corporations Act excludes from an " ongoing fee arrangement " those fees the total of which are known, except that they are being paid over a period of more than 12 months . If the total fees to be paid under the arrangement are known in advance, and the client cannot " opt out " of paying them, then they will be exempt from " opt - in " .

Separately, s ection 962A(4) of the Corporations Act excludes insurance p remiums from an " ongoing fee arrangement " , so long as the insurance premiums are the only fees payable under the arrangement.

What is the scope of "grandfathering"? Are all ongoing fee arrangements grandfathered in relation to a retail client once that cl ient has received advice prior to 1 July 2013?

The " opt - in " provisions are expressly clear that they only apply where the retail client has not been provided with personal advice prior to the commencing day (which for the AFS licensee is 1 July 2013), and in relation to " ongoing fee arrangements " entered into on or after 1 July 2013. 21

Accordingly:

  • All pre - 1 July 2013 "ongoing fee arrangements" will be grandfathered.
  • All post - 1 July 2013 "ongoing fee arrangements" will be grandfathered in relation to a retail client who has received personal advice from the fee recipient pre - 1 July 2013.

The second point above widens the scope of grandfathering considerably, given - as indicated above – that there does not need to be a connection between the personal advic e given and the ongoing fees charged. Accordingly, so long as the retail client received personal advice prior to 1 July 2013, all future ongoing fee arrangements between the client and the fee recipient will be grandfathered.

When do fee disclosure state ments need to be given in respect of grandfathered arrangements?

The definition of " disclosure day " (discussed above) raises the question of when the first fee disclosure statement needs to be given to an existing retail client with whom the fee recipient has an ongoing fee arrangement (ie grandfathered arrangements). What if the arrangement commenced, say, on 1 July 2005? Does this mean that a fee disclosure statement should have been given before 31 July 2006? In other words, does s ection 962G have retros pective effect?

Regulations have not been made to date to expressly deal with this positio n. It is accepted, however, that :

  • in what is known as the "golden rule" of statutory interpretation, the literal meaning of words used in legislation should not be adopted if they lead to absurd or unreasonable results 22; and
  • a legislative provision should not have retrospective effect unless it is expressly or impliedly designed to be of retrospective effect. There is also a general principle of law which creates a presumption against retrospectivity.23

Does this mean that we can proceed on the basis that the " disclosure day " for the provision of the first fee disclosure statement in respect of grandfathered arrangements, cannot be earlier than the anniversary date whi ch first occurs from 1 July 2013 ? Either way, the anniversary date for all existing arrangements needs to be determined. This may prove tricky for legacy clients.

The industry expects legislative change to deal with these issues, following the Coalition's announcement in December 2013.

How do we know when an "ongoing fee arrangement" has commenced?

There is no exact science in determining when an ongoing fee arrangement commenced. This is because it must by definition be determined on a case - by - case basis: in some cases, it will be the date on which the client's account was opened; in other cases, th e arrangement may have commenced well after the opening of the client's account. Also, does " commencement " mean the date of receipt of the first ongoing payment, or is it the date on which the fee recipient's right to be paid first arises ?

14 ASIC appears t o understand the concerns around determining " disclosure days " for grandfathered clients. In ASIC Regulatory Guide 245 ( RG 245 ), ASIC provides as follows: 24

" We expect fee recipients to document the approach taken to identify the date that ongoing fee arra ngements were entered into with existing clients and to apply that approach consistently across their client book. We accept that they might take different approaches for different categories of client.
Where it is impossible or unreasonably difficult to identify the actual date that an ongoing fee arrangement was entered into with an existing client, we think fee recipients should adopt a common sense approach. For example, they could give the first [fee disclosure statement] to all existing clients with in 30 days of 1 July 2013.
Alternatively, if it is impossible or unreasonably onerous to determine the day an ongoing fee arrangement was entered into with an existing client, we will not take enforcement action against a fee recipient (for failing to pr ovide the [fee disclosure statement] to an existing client within a period of 30 days beginning on the first disclosure day) if the fee recipient:
  1. notifies the client in writing of the date (between 1 July 2013 and 31 January 2014)they will treat as the anniversary of the day on which the ongoing fee arrangement was entered into;
  2. explains to the client the significance of that date for the purposes of the [fee disclosure statement]obligations; and
  3. provides the client with[a fee disclosure statement]within 30 days of the first anniversary of that date."

When do payments need to be switched off?

Payments need to be switched off immediately upon the termination of the ongoing fee arrangement. Analysing the above, we can see that there are essentially 5 possible termination dates of an ongoing fee arrangement. These are as follows. Note these apply only in relation to non - grandfathered arrangements.

  • If the client notifies the fee recipient in writing within the renewal period that they do not wish to renew the arrangement, the arrangement terminates on the day the notification is given.
  • If the client does not notify the fee recipient in writing within the renewal period that they wish to renew the arrangement, the arrangement terminates 30 days after the end of the renewal period . This effectively allows the ongoing fee arrangement to continue for 90 days after the second anniversary date.
  • Consistent with the above, if the client "opts - in" to the ongoing fee arrangement outside the renewal period (for example, 40 days after receiving the renewal notice), the arrangement will still terminate 30 days after the end of the renewal period : this is because the legislation strictly requires " opt-in "to occur within the renewal period. Effectively, this means that the fee recipient will need to commence a new ongoing fee arrangement with the client.
  • If the client notifies the fee recipient in writing outside the renewal notice period that they do not wish to renew the arrangement, the arrangement terminates on the day the notification is given.
  • If the fee recipient does not comply with the requirements for the giving of a renewal notice and a fee disclosure statement to the retail client (ie both the obligation to give the documents the content of which accord with the requirements of the Corporations Act, and to give them within the prescribed time), the arrangement terminates on the day which follows the end of the prescribed period for giving the documents.

Note that the legislation does not expressly provide that the failure to give a fee disclosure statement in relation to grandfathered arrangement s, causes the arrangement to terminate. However, it does provide that the failure to do so for grandfathered arrangements, is a civil penalty provision. This means the fee recipient is liable to pay a penalty.

Is the fee recipient entitled to pro - rata pay ments?

Where an arrangement is terminated, the fee recipient is entitled to be paid its accrued entitlements. To give an example, if an arrangement was such that monthly fees were payable, the termination of the arrangement half - way through that monthly cy cle would mean the fee recipient was entitled to 50% of that monthly fee.

Footnotes

1 Financial product advice is provided when the advice in question is intended (or could reasonably be regarded as having intended) to induce the client to make a decision in relation to a financial product. Such advice becomes personal advice when it is given after taking into acco unt the client's circumstances, needs and objectives.
2 Section 961L.
3 Section 961K.
4 Section 961M.
5 Section 961G.
6 Section 961J.
7 RG 175.229.
8 RG 175.230.
9 RG 175.230.
10 RG 175.235.
11 RG 175.235.
12 RG 175.328 - 175.330.
13 Section 962E.
14 Section 962K.
15 Section 962L.
16 Section 962L.
17 Section 962M.
18 Section 962N.
19 Section 962S.
20 Section 962J.
21 Section 962D.
22 Sakhuja v Allen [1973] AC 152.
23 Fisher v Hebburn Ltd (1960) 105 CLR 188.
24 RG 245.60 - 245.62.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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This article is part of a series: Click Part I - "Adviser" Duties for the previous article.
This article is part of a series: Click Part I - "Adviser" Duties for the next article.
This article is part of a series: Click Part II - Prohibited Payments for the next article.
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    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions