Today marks a historic moment for consumers and the financial services industry in this country, according to Ross Cameron, the Parliamentary Secretary to the Treasurer.
From midnight, the Financial Services Reform Act ( FSRA) takes full effect, putting in place a uniform licensing, conduct and disclosure regime for financial markets, products and services.
"The new regime is intended to promote market innovation and competition and improve the quality and level of information available to consumers," Mr Cameron said.
"A major component of this is the significantly enhanced level and quality of information available to retail consumers to help them make informed financial decisions," he said.
Retail consumers will benefit from the obligation for a financial service or product provider to have dispute resolution mechanisms in place, cooling-off periods for certain products and provision for compensation where the Act is breached.
"Industry will also benefit", said Mr Cameron. "Increased transparency and improvements in the protection of consumers will have the benefit of promoting consumer confidence, thereby increasing activity in the financial services market."
This enormous legislative undertaking is part of the Government's Corporate Law Economic Reform Program, known as CLERP 6. The FSRA stemmed from the Financial System Inquiry, commissioned by the Treasurer in 1996 'to achieve a more competitive and efficient financial system'.
Starting on 11 March 2002 with a two year transition period, the FSRA has now replaced Chapters 7 and 8 of the Corporations Act 2001 (Cth) with a new Chapter 7.
"To remain competitive in an increasingly globalised market, it is vital that the Australian financial sector evolves to adopt the world's best regulatory practices. This Government's commitment to Financial Services Reform has put in place a regulatory framework that is now regarded as one of the world's best," Mr Cameron said.
Mr Cameron also recognised the concerns raised by some participants in complying with the new regime. "I understand that with any new regulatory framework, it takes some time and practical experience for compliance systems to be refined and the FSRA is no exception. As such, the Government expects that ASIC will approach administration of the new arrangements in a flexible, sensible and pragmatic manner.
"I would like to take this opportunity to convey the Government's appreciation to the wide range of companies, individuals and industry bodies that have contributed to the development and implementation of the new regime.