SMSF Association Submission
The SMSF Association (SMSFA) welcomes the opportunity to make a submission on Treasury’s design and distribution obligations and product intervention power draft legislation.
The introduction of these measures will help increase the standard of financial products as well as the culture surrounding their creation. We believe the measures will further align the interests of consumers with those of issuers and distributors of financial products but should not negatively affect firms striving to create innovative and valuable products.
The introduction of broader proactive powers for the Australian Securities Investment Commission (ASIC) will also provide an effective form of reducing significant consumer detriment. We believe the intervention power’s main utility comes from its ability to influence product providers’ behaviours and to be exercised swiftly when required. At the same time, it is imperative that this power should be exercised mainly as a last resort.
We recommend that this legislation be reviewed after its implementation in three to five years. We deem this essential to ensure the legislation is achieving the policy intent of the measures without having damaging effects on innovation and consumer choice. We would have concerns if more complex or higher risk financial products are no longer developed because of the complexity of meeting the target