Consultation paper on FSI recommendation

The Government has released information that they are seeking feedback on a consultation paper that will impact Australia’s financial services sector. As part of the Government’s response to the Financial System Inquiry (FSI), Improving Australia’s Financial System 2015, 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 temporary product intervention power for the Australian Securities and Investments Commission when there is a risk of significant consumer detriment (FSI recommendation 22).

The consultation paper seeks feedback on the implementation of these measures.

NIBA CEO Dallas Booth said: “This is a really important recommendation from the Financial System Inquiry, because it has new legal concepts and new obligations on insurers and brokers. We will be examining it very carefully and will be consulting with our Regulatory Affairs Committee and Board before responding to the discussion paper.”

In order to assist interested parties in providing feedback, the Paper outlines proposals to illustrate how the measures could operate in practice. This approach recognises that many of the elements of the measures are interrelated and so to provide feedback people need to be able to view the measures holistically.

The media release states: “The proposals outlined in this paper are intended to elicit specific and focused feedback, and should not be viewed as a statement of the Government’s final policy position.”