The Government has released for public consultation exposure draft regulations to support the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 and an explanatory statement. The Bill implements the Government's response to the Financial System Inquiry (FSI), Improving Australia's Financial System 2015, whereby the Government accepted the FSI's recommendations to introduce:
- design and distribution obligations for financial products to ensure that products are targeted at the right people (FSI recommendation 21); and
- a product intervention power for the Australian Securities and Investments Commission (ASIC) when there is a risk of significant consumer detriment (FSI recommendation 22).
The regulations support the Government's proposed reforms by:
- applying the regime to a range of financial products not covered by the Bill and by ensuring that the regime operates as intended when applying to distributors of financial products; and
- altering the products that may be subject to a product intervention order by ASIC.
The Government previously released exposure draft legislation for consultation on 21 December 2017 and on 20 July 2018. On 20 September 2018, the Government introduced the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018 into Parliament.