The Federal Government has opened the way for discussion about whether superannuation, including MySuper, should be opened up to the same Australian Securities and Investments Commission (ASIC) product intervention power as that applied to insurance and investment products made available to retail clients.
The Treasury discussion paper underpinning the Government move on product intervention, has sought to canvass the views of industry participants on whether superannuation and retirement products should be wrapped up in the proposed new regime.
It asks those involved in the industry their views on the issue and whether they "agree with all financial products except for ordinary shares being subject to both the design and distribution obligations and the product intervention power".
It then asks: "Are there any financial products where the existing level of consumer protections means they should be excluded from the measures (for example, default (MySuper) or mass-customised (comprehensive income products for retirement) superannuation products)?"
"Do you agree with the design and distribution obligations and the product intervention power only applying to products made available to retail clients? If not, please explain why with relevant examples," the discussion paper said.
Providing the discussion paper to the industry, the Minister for Revenue and Financial Services, Kelly O'Dwyer said the measures would improve outcomes for consumers and make ASIC a more proactive regulator.
"The design and distribution measures will make product issuers and distributors more accountable for the products they sell and are consistent with similar action already undertaken in other jurisdictions," she said.
"The product intervention power will empower ASIC to take direct action to address problems with financial products."
The consultation period around the discussion paper will last for three months, with O'Dwyer saying the Government was looking to ensure the final policy struck the right balance between increasing consumer protections without imposing an undue burden on industry or stifling innovation.
The proposed terms of the product intervention regime would see ASIC able to intervene in circumstances where it could identify significant consumer detriment with an intervention capable of lasting up to 18 months, subject to Parliamentary intervention.
The measures would impose significant new obligations on product distributors, including identifying appropriate target markets and putting in place measures to ensure the products are distributed appropriately.