ASIC pushes design and distribution out to late 2021

Consistent with the Federal Treasurer, Josh Frydenberg’s announcement around the delayed implementation of Royal Commission recommendations, the Australian Securities and Investments Commission (ASIC) has announced it will not be proceeding with mortgage broker best interest duty and remuneration reforms or design and distribution obligations for at least six months.

The regulator, which in mid-March announced a recalibration of its regulatory priorities said it would be deferring the commencement date of the mortgage broker best interest duty and remuneration reforms and the design and distribution obligations for six months from their original commencement dates.

This is even though both measures had already been legislated. It said it was doing so, given the significant impact of COVID-19 on the Australian economy, especially on the financial system and consumers.

“ASIC will defer the commencement date for the mortgage broker reforms until 1 January, 2021. ASIC will defer the commencement date for the design and distribution obligations until 5 October 2021,” it said.

“The deferral of these reforms follows, and is consistent with, the Government’s announcement to defer by six months the implementation of commitments associated with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry as a result of the significant impacts of COVID-19.

“ASIC has deferred the commencement dates so industry participants can focus on immediate priorities and the needs of their customers at this difficult time. In making this decision, ASIC also had regard to the important protections for consumers that these requirements introduce.

“We expect entities will continue preparing for commencement on the extended timeline. ASIC has also conveyed our expectations of meeting consumer needs at this time, including directly to lenders and insurers.”