Submission: Design and Distribution Obligations and Product Intervention Powers
We are grateful for the opportunity to comment on the exposure draft of the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018
We strongly support the integrated package of reforms proposed in the Bill, which we believe would significantly improve consumer outcomes and improve trust and confidence in the financial system. The design and distribution obligations (DADOs) should help to achieve a cultural shift within financial firms away from simply ‘selling’ financial products towards designing and distributing suitable products that meet customer needs. Further, equipping the Australian Securities and Investments Commission (ASIC) with the product intervention powers would allow the regulator to intervene before consumer harm occurs and deter misconduct by financial firms.
Where this submission is silent on proposed reforms, we can be taken as being supportive. While we are supportive of the proposed reforms, we consider that the Bill should be strengthened in several key areas. Most importantly, we recommend that the new DADOs and product intervention powers apply to ‘financial products’ as defined in the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). This would ensure that a broader range of financial products is captured by the reforms, including regulated and unregulated consumer credit.180208 PIP DADO Joint Consumer Submission FINAL