Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, today released a consultation paper seeking feedback on two key proposals from the Financial System Inquiry. The first is the introduction of design and distribution obligations on issuers and distributors. The second is a product intervention power for ASIC, which would enable the regulator to intervene where a product is identified as creating a risk of significant consumer detriment.
“These measures will improve outcomes for consumers and make ASIC a more proactive regulator.” Minister O’Dwyer said.
The design and distribution measures will make product issuers and distributors more accountable for the products they sell and are consistent with similar action already undertaken in other jurisdictions. The product intervention power will empower ASIC to take direct action to address problems with financial products.
The paper sets out a series of proposals to provide stakeholders with an indication of how the measures could operate in practice. The Government will undertake extensive consultation on the proposals to ensure the final policy strikes the right balance between increasing consumer protections without imposing an undue burden on industry or stifling innovation.
The measures build on the substantial steps already undertaken by the Government including the introduction of legislation to raise professional standards for financial advisers and to improve remuneration arrangements in the life insurance sector.
“Implementation of these measures is a further example of the Turnbull Government taking real action to protect consumers of financial products and services.” Minister O’Dwyer said.
“The consultation period on the paper will be 3 months, recognising the complexity of the measures, and the importance of getting the balance right, as well as taking into account the holiday season.”
The due date for submissions is the 15 March 2017.
The consultation paper is available on the Treasury website.