Market conduct, disclosure and client communications
What this domain tests
This domain tests whether your marketing, advice, and ongoing communications are fair, clear, and not misleading, and whether you can prove what was said.
Core rules and concepts
Retail offers generally require a product disclosure statement under the FMC Act, containing key features, risks, fees, and complaint information. Dealers must also give ongoing disclosure of material changes. Advertising must be consistent with the PDS and must not present a false or misleading impression; risk warnings cannot be buried. Communications must identify the firm and, where relevant, the adviser and their disclosure obligations. Conflicts must be disclosed. Client instructions and communications should be recorded, including phone calls where practicable.
Worked example
A dealer promotes a managed fund with the headline Government-backed, 9% fixed. In fact the fund is unlisted, unsecured, and the return is only a target. This is misleading conduct: the headline is false, and the small print does not cure it. The correct approach is to withdraw the advertisement, correct the record, and notify compliance. If retail clients were induced, remediation and breach assessment follow.
Traps
Assuming disclosure is a one-off event at onboarding. Believing a disclaimer at the bottom of a page neutralises a false headline. Overlooking verbal statements, which are communications too. Treating a target return as guaranteed in client conversations.