Lawyers oppose extending ASIC powers
The Australian Securities and Investments Commission (ASIC) does not currently have the skills or resources to justify it being granted product intervention powers, according to the Law Council of Australia.
The Law Council's Business Law Section (BLS) has used a submission to the Financial Systems Inquiry to point to existing questions about whether ASIC currently possesses "the cultural and skills mix, and the resources, to carry out its existing responsibilities".
It said that it was in these circumstances that the BLS was concerned that "expanding ASIC's mandate by granting it product intervention powers would compound this problem"
"The task of anticipating potential problems before they arise and devising proportionate responses that do not interfere unduly with normal market behaviour or impose unwarranted regulatory burdens on business is fundamentally different from anything ASIC currently does and would require skills and resources ASIC does not currently possess," the submission said.
"The BLS is very concerned that giving ASIC product intervention powers of the sort proposed in the Interim Report would effectively delegate to ASIC the power to regulate how financial products are designed, developed and distributed, with likely very significant unintended consequences<" it said.
"In the BLS's view, this would be a fundamental change in ASIC's role, making it a "merits" regulator as well as a "conduct and disclosure" regulator. This would go well beyond simply enhancing ASIC's "regulatory toolkit" - it would be a very significant change in the regulatory architecture."
"In the BLS's view, the case for this change has not been made out," the submission said.
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