The Government has given its support to a “user pays” industry funding model for ASIC in line with the recommendations of the Financial System Inquiry (FSI). A consultation paper has been issued today by Assistant Treasurer, Josh Frydenberg, detailing how the funding model will work.
The new funding model will require the biggest users of
Technology led innovation can cause much indigestion for conduct and prudential regulators as they try to find the right regulatory pigeion hole for innovators in their regimes that were not built to handle such innovation. It is this disruptive impact of innovation that is shaping the regulation of tomorrow.
Numerous conduct regulators around the world
The FSI referred to studies undertaken after natural disasters revealing inadvertent underinsurance due to consumers struggling to make an informed decision about the sum insured. Survey results highlight that even when consumers take the time to read insurance documentation, including the product disclosure statement, many misunderstand it, scan it briefly due to over-reliance on sales
The FSI has recommended that the competency of financial advice providers be raised and an enhanced register of advisers introduced.
The Government is currently considering mechanisms to raise minimum education requirements for financial advisers and the FSI recommends that this be prioritised.
The FSI found that the minimum standards are currently too low which affects
The FSI has recommended that ASIC be granted a product intervention power to enable it to take a more proactive approach to reducing the risk of significant detriment to consumers. Specifically, this new power would allow the regulator to intervene to require or impose:
The release of the final report of the Financial Systems Inquiry (FSI) brings us a step closer to a significant shift in conduct regulation in Australia.
As we have previously reported, Australia seems set to join a UK and European trend away from regulation driven by disclosure towards an approach where product providers bear