The Australian Securities and Investment Commission (ASIC) has launched a consultation paper on the proposed administration of its tough new powers to intervene when financial institutions behave badly.
Deputy Chair of ASIC, Karen Chester said the new product intervention power allowed ASIC to intervene and take temporary action where financial and credit products had resulted in, or were likely to result in, significant consumer detriment.
Ms Chester said the new power was “an incredibly important addition to ASIC’s regulatory toolkit”.
“ASIC can step in and respond to significant consumer detriment in a targeted and timely way, but there are also important checks and balances,” Ms Chester said.
“It is a temporary intervention power and we must consult before each and every use.”
She said the product intervention power would be a broad and flexible tool for ASIC to use.
“ASIC can take a range of temporary actions including banning a product or product feature, imposing sale restrictions, amending product information or choice architecture,” Ms Chester said.
“To assist consultation, the paper provides case studies of past products and practices to illustrate the circumstances in which ASIC may have contemplated using the Product Intervention Power — had it been available — to address consumer detriment identified at the time.”
She said the product intervention power was not a new concept, with similar legislation in place in The United States and the European Union, among others.
Public input is sought on the product intervention power consultation paper until 7 August, with a final regulatory guide to be in place by September.
ASIC’s 27-page consultation paper can be accessed at this PS News link.
