Gov’t to lead regulatory revolution

The Federal Government has released details of what it describes as the first stage of its plan to bring financial services regulation in Australia into the 21^st century.

Treasurer Wayne Swan and Superannuation and Corporate Law Minister Nick Sherry today released a green paper which outlines Labor’s proposal to transfer state-regulated sectors of the financial services industry to the Federal level. Affected sectors include mortgage-broking, margin lending, non-bank lending and trustee companies.

“We’ll have single standard, financial services regulation for the overwhelming majority of financial products in this country,” Sherry said.

“This is about better protection of the mums and dads who take out a mortgage and deserve to know that the brokers selling it to them are reputable and upfront with their fees and charges.”

The paper was ordered by the Government in response to the Opes Prime and Lift Capital crises earlier this year.

Sherry said the plan would bring Australia’s financial services industry into line with best global practice.

“The current legislation in these areas is duplicated, patchy, confusing, very hard to change or non-existent. As a result, some consumers receive poor or inadequate advice while opportunistic product promoters use gaps in existing legislation to take advantage of vulnerable investors.”

The green paper invites input from the general public on the regulation of other credit products, including credit cards and personal loans, as well as now unregulated property investment schemes.