ASIC to take 'reasonable' approach in early stages of reforms

The Australian Securities and Investments Commission (ASIC) has announced it will take a reasonable approach in the early stages of the reforms arising from the Hayne Royal Commission and other inquiries.

The new laws would include design and distribution obligations (DDOs), restrictions on the unsolicited selling of financial products (hawking), a deferred sales model for add-on insurance products, reference checking and information sharing requirements for financial advisers and brokers, and new requirements around how breaches were reported to ASIC and disputes were managed internally in firms.

The new laws would provide consumers with long-term protection from the harms highlighted by the Royal Commission, and close regulatory gaps that previously existed.

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The corporate regulator also said that in adopting this approach, it would consider the context that firms were operating in, including the scale of the changes and the challenges arising from the current operating environment.

The benefits of the reforms would include: 

  • Consumer focused product design at the heart of business models, and more transparency about target markets;
  • A reduction in sales that occurred in circumstances where consumers were subject to pressure;
  • Greater transparency about problems arising, in the form of complaints and number of breaches; and
  • More consumer-centric and timely complaint handling.

“These changes will support fairer outcomes for consumers and a stronger financial system for all Australians,” ASIC chair Joe Longo said.

“While these reforms have been in the pipeline for some time, ASIC recognises they require significant changes to businesses’ systems and processes and take effect at the same time industry is facing other challenges, including from COVID-19 and renewed lockdowns.

“We therefore recognise there will be a period of transition as industry finalises implementation of additional compliance measures, and ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply.”

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".....ASIC will take a reasonable approach in the early stages of these reforms provided industry participants are using their best efforts to comply.” I assume the AISC will then revert to it's normal approach?

Correct. Jack-boots & truncheons at the fore, as per normal day at the ASIC office in the planning division, whereas in the union industry super welcoming suite, it's dandelion tea, warm organic scones and the faint scents of wafting vanilla flavoured bullsh*t in the air

What, how is this an announcement? What.the.actual.

Timeshare advice is in ASIC sights is my reading of this article.

As opposed to ASIC's usual 'unreasonable' approach towards financial advisers. I note the 12 month Opt-In is missing from their list, despite their being no ASIC mandated template and we are forced to roll out this overcomplicated mess in the middle of a pandemic. What a sad and pathetic bunch of bureaucrats ASIC are.

George, I am actually thinking they're a very well orchestrated focussed group at ASIC, given their previous 'Fuhrer' Shipton, who was later shown by his actions to be no better than a thieving fraudulent crook, had a mantra of 'heads on sticks'. (Or was that the prior corrupt Kell or the even earlier Mad Butcher Medcraft? In any event, there is a clear culture and design towards terminating troublesome planners off the financial landscape extending back many many years to the Labor appointees when they held Gov.).

No, I think ASIC are very clear on the objectives they wish to achieve and only currently being tempered by the recent media and political scrutiny a few LNP pollies have put on them.

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