The Australian Securities and Investments Commission (ASIC) is seeking public input on the proposed administration of its new product intervention power.
ASIC is consulting with industry on the scope of the product intervention power, when and how ASIC expects to use the power, and how a product intervention order is made.
The new ASIC power allows the corporate watchdog to intervene and take temporary action where financial and credit products have resulted in, or are likely to result in, significant consumer detriment. The range of temporary actions include banning a product or product feature, imposing sale restrictions, and amending product information or choice architecture.
“The product intervention power is an incredibly important addition to ASIC’s regulatory toolkit,” said Karen Chester, ASIC deputy chair. “ASIC can now step in and respond to significant consumer detriment in a targeted and timely way. But there are also important checks and balances – it is a temporary intervention power and we must consult before each and every use.”
To assist consultation, the paper also includes 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.
The new ASIC power was enacted in April 2019 with new design and distribution obligations. The product intervention power is available for ASIC to use now while the design and distribution obligations are set to take effect in April 2021.
Stakeholder feedback are accepted until Aug. 27, while the final regulatory guide set to be released in September. ASIC will release a further, separate consultation on its proposed guidance on the design and distribution obligations later this year.