ob体育 has welcomed the passage of key financial services reforms contained in the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) legislation introducing:
- a design and聽distribution obligations regime for financial services firms; and
- a product intervention聽power for ob体育
The design and distribution obligations will bring accountability for issuers and distributors to design, market and distribute financial and credit products that meet consumer needs. Phased in over two years, this will require issuers to identify in advance the consumers for whom their products are appropriate, and direct distribution to that target market.
The product intervention power will strengthen ob体育鈥檚 consumer protection toolkit by equipping it with the power to intervene where there is a risk of significant consumer detriment. To take effect immediately, this will better enable ob体育 to prevent or mitigate significant harms to consumers.
These reforms were recommended by the Financial System Inquiry in 2014 and represent a fundamental shift away from relying predominantly on disclosure to drive good consumer outcomes.聽聽
ob体育 Chair James Shipton said the reforms were a critical factor in the development of a financial services industry in which consumers could feel confident placing their trust.聽聽聽
鈥楾hese new powers will enable ob体育 to take broader, more proactive action to improve standards and achieve fairer consumer outcomes in the financial services sector. This will be a significant boost for ob体育 in achieving its vision of a fair, strong and efficient financial system for all Australians,鈥� he said.
鈥楾his will also provide invaluable assistance to ob体育 as we all seek to rebuild the community鈥檚 trust in our banking and broader wealth management industries. And we note the overwhelming level of support this attracted from across the Parliament.鈥櫬犅�
Mr Shipton also welcomed the amendments to the original legislation, which extended the reach of these reforms, providing a comprehensive framework of protection for most consumer financial products. It will also empower ob体育 to intervene in relation to a wider range of products where ob体育 identifies a risk of significant detriment to consumers.
The ob体育 Podcast: Episode 45
For more information on the product invention powers and design and distribution obligations, listen to the Episode 45 of The ob体育 Podcast with ob体育 Executive Director, Strategy, Greg Kirk.