In what represented one of the last legislative act of the current Parliament, the Australian Securities and Investments Commission (ASIC) has been handed product intervention powers.
The Assistant Treasurer, Stuart Robert welcomed the fact that the Parliament had passed legislation to introduce design and distribution obligations for all financial and credit products within ASIC’s regulatory responsibility.
The legislative change will directly impact financial services product manufacturers and financial planners and allow ASIC to intervene where the regulator believes there is actual, or the risk of, significant consumer detriment being caused by a financial product.
“These reforms mean consumers will be better protected from being sold financial and credit products that are not suitable for their circumstances,” the Assistant Treasurer’s announcement said.
In doing so, he acknowledged that the product intervention power was not one of the specific recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry but were consistent with the Commissioner’s views on extending ASIC’s regulatory responsibilities.
“The changes we are announcing will also implement recommendations 21 and 22 of the Financial System Inquiry to strengthen product issuer and distributor accountability and introduce a product intervention power,” Robert said.