Going further by expanding ASIC powers
The Coalition Government has passed legislation through the Parliament to introduce design and distribution obligations for all financial and credit products within the Australian Securities and Investments Commission’s (ASIC) regulatory responsibility.
The legislation will also allow ASIC to now intervene where 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.
Restoring trust in Australia’s financial system is part of our plan for a stronger economy.
That is why the Coalition Government is taking action on all 76 recommendations of the Royal Commission’s Final Report and, in a number of important areas, is going further including by better protecting consumers.
By introducing design and distribution obligations and providing ASIC the power to intervene, the Government is yet again going further in its response to the Royal Commission.
While Commissioner Hayne did not recommend these expanded powers and obligations, he noted that “the reforms recognise that current disclosure requirements are not, on their own, sufficient to inform consumers fully” and suggested that they ought to be extended to all financial products and credit products within ASIC’s regulatory responsibility.
The changes we are announcing today 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.