Consumer outcomes Recommendation Government action Inquiry Recommendation 21 — Strengthen product issuer and The Government agrees to create a targeted and principles-based distributor accountability financial product design and distribution obligation. Introduce a targeted and principles-based product design and Implementation of this recommendation will be subject to detailed consultation with stakeholders to ensure that the scope of the obligation enhances consumer distribution obligation. protection without placing an undue burden on industry. Inquiry Recommendation 22 — Introduce product The Government agrees to provide ASIC with a financial product intervention power intervention power to enable it to modify, or if necessary, ban harmful financial products where there is a risk of significant consumer detriment. Introduce a proactive product intervention power that would Implementation of this recommendation will be subject to detailed consultation enhance the regulatory toolkit available where there is risk of significant consumer detriment. with stakeholders to ensure that the power strikes the right balance — providing ASIC with a tool to enable it to take action in exceptional instances, but without stifling industry innovation. Inquiry Recommendation 23 — Facilitate innovative disclosure The Government agrees that regulatory impediments to innovative product disclosure should be removed. We note efforts led by ASIC and the industry to Remove regulatory impediments to innovative product promote innovative product disclosure. With the benefit of information received disclosure and communication with consumers, and improve the from these processes, we will develop legislation to remove any regulatory way risk and fees are communicated to consumers. impediments identified when those processes are complete in 2017. We support the Inquiry’s calls for industry-led initiatives to improve disclosure of risk and fees.
Consumer outcomes Recommendation Government action Inquiry Recommendation 21 — Strengthen product issuer and distributor accountability Introduce a targeted and principles-based product design and distribution obligation. The Government agrees to create a targeted and principles-based financial product design and distribution obligation. Implementation of this recommendation will be subject to detailed consultation with stakeholders to ensure that the scope of the obligation enhances consumer protection without placing an undue burden on industry. Inquiry Recommendation 22 — Introduce product intervention power Introduce a proactive product intervention power that would enhance the regulatory toolkit available where there is risk of significant consumer detriment. The Government agrees to provide ASIC with a financial product intervention power to enable it to modify, or if necessary, ban harmful financial products where there is a risk of significant consumer detriment. Implementation of this recommendation will be subject to detailed consultation with stakeholders to ensure that the power strikes the right balance — providing ASIC with a tool to enable it to take action in exceptional instances, but without stifling industry innovation. Inquiry Recommendation 23 — Facilitate innovative disclosure Remove regulatory impediments to innovative product disclosure and communication with consumers, and improve the way risk and fees are communicated to consumers. The Government agrees that regulatory impediments to innovative product disclosure should be removed. We note efforts led by ASIC and the industry to promote innovative product disclosure. With the benefit of information received from these processes, we will develop legislation to remove any regulatory impediments identified when those processes are complete in 2017. We support the Inquiry’s calls for industry-led initiatives to improve disclosure of risk and fees.
Government-Response.docx