New ASIC powers are incoming

Alex Burke,  Senior Writer,  No More Practice Education

ASIC's new product intervention powers are now open for consultation.

We discussed the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 last year. The goal of the new legislation was to "ensure that financial products are targeted and sold appropriately."

The bill affected advisers as distributors of retail products, and under the new laws advisers would be required to implement controls to ensure products are distributed in accordance with the relevant target markets and "comply with reasonable requests for information from the issuer in relation to the product's review."

How ASIC will change its focus

ASIC's powers will change as a result of the bill, with the regulator able to intervene and "take temporary action where financial and credit products have resulted in or are likely to result in, significant consumer detriment." Importantly, the law focuses on "reducing significant detriment to consumers," as opposed to just having ASIC step in after a breach of the law.

Explaining ASIC's new powers, deputy chair Karen Chester said: "The product intervention power is an incredibly important addition to ASIC’s regulatory toolkit."

"ASIC can now step in and respond to significant consumer detriment in a targeted and timely way," she continued. "But there are also important checks and balances – it is a temporary intervention power and we must consult before each and every use."

Chester also noted that the intervention powers are not a new concept: "Australia is joining regulators in other jurisdictions like the US, the UK, the EU, Hong Kong and Taiwan with product intervention powers."

So what’s open for consultation?

According to ASIC’s statement, the aspects of the new powers open for consultation are:

  • the meaning of significant consumer detriment, including the impact the detriment has on consumers and the factors we will take into account in determining whether significant consumer detriment is likely to occur
  • the types of interventions we can make and examples of these interventions
  • limitations of the power
  • consultation with affected persons
  • how significant consumer detriment will be described at consultation
  • when a product intervention order will commence
  • the consequences of breaching an intervention order.

Consultation is open until August 7 – you can make a submission using this email address.


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

Liked this article? Let us know

Want more of the latest in opinions, expert insights and training?

Subscribe to our free eNewsletter now

/ Related content

ASIC pulls trigger on remuneration crackdown

A new case sheds light on the regulator's plans.

New financial complaints body expands remit

AFCA has been given new powers to handle complaints about financial misc....

ASIC commences grandfathering wind-up

Licensees are now under investigation - here's what you need to know.

Leave a comment /

Related content /

25 June, 2019

Alex Burke,Senior Writer,No More Practice Education

New financial complaints body expands remit

AFCA has been given new powers to handle complaints about financial misconduct. 

Read now

04 June, 2019

Alex Burke,Senior Writer,No More Practice Education

ASIC commences grandfathering wind-up

Licensees are now under investigation - here's what you need to know.

Read now

WordPress Lightbox Plugin