ASIC will not ignore ‘lawful’ behaviour

Just because something is lawful doesn’t mean it won’t grab the attention of the Australian Securities and Investments Commission (ASIC) and the use of its proposed product intervention powers.

The regulator has provided documentation to the Senate Economics Legislation Committee explaining that while the product intervention power is intended to allow ASIC to intervene
“prospectively”, that does not mean it will not act where consumer compensation is involved.

“There are some cases where we might intervene in relation to consumer detriment which was caused by conduct that was completely lawful at the time,” ASIC told the committee. “In these cases, we will not be able to go back and declare that such conduct was unlawful and require compensation to be paid. We think this is appropriate.”

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However, it said that in other cases it might intervene in relation to “lawful conduct that was driving unlawful conduct” and cited its recent intervention into flex commissions which, while not unlawful, resulted in skewed incentives which drove unlawful and deceptive conduct.

“In such cases, we could intervene prospectively to address the lawful conduct driving the harm (i.e. by banning flex commissions), and in relation to the unlawful conduct, if we can gather evidence of that conduct, then we can seek compensation on behalf of consumers in relation that conduct (i.e. the misleading and deceptive conduct or unconscionable conduct),” ASIC said.

It said that, alternately the consumers impacted by the unlawful conduct could directly seek compensation, either through AFCA or through the courts.

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There is something strange in ASIC banning lawful conduct. I wonder if they might not be acting ultra vires in such cases.

I am confused. ASIC have told me on a number of occasions they do NOT interpret the law, their only role is to administer it. Which is correct? Are they interpreting, and setting the standard above the law, or are they administering the law only, or are they just as telling people different things depending on who they talk to?

Very valid point. I also recall being given what could only be akin to a 'lecture' by an ASIC employee about how the interpretation of the law was my responsibility, and that their role was as an enforcer of the law.

It appears they are embracing the "whatever makes us sound like a caring organisation." program adopted by the banks.

They should return to just manufacturing running shoes, I'm sure that was far less stress for management!

ASIC what about unconscionable conduct or socially unacceptable conduct, such as your staff quotas and openly stated 'heads on sticks' approach? Or the fact that you refuse to investigate ISA funds or their so called advice?

No wonder you are no longer 'public servants', as you're clearly now totally self serving.

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