Lawyers argue against post-sale product intervention

lawyers/Law-Council-of-Australia/financial-products/distribution/senate/Senate-Committee/Treasury-Laws-Amendment/design-and-distribution-obligations/DDOs/product-intervention-powers/advisers/the-Bill/australian-securities-and-investments-commission/ASIC/legislation/

26 October 2018
| By Mike |
image
image
expand image

Proposed new financial product design and distribution laws should not extend to conduct that occurs after a financial product has been formally acquired, according to the Law Council of Australia.

In a submission filed with the Senate Economics Legislation Committee review of the Government’s Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Bill 2018, the Law Council said it believed an amendment was necessary with respect to the definition of “retail product distribution conduct”.

It suggested that this could influence the activities of distributors such as advisers and superannuation fund trustees where they might well give a Product Disclosure Statement to an existing superannuation fund member as a means of reminding the member of the features of their product.

The Law Council submission noted that a similar limitation had already been included in the Bill in relation to the Australian Securities and Investments Commission’s product intervention powers.

It said that under that power, the legislation proposed that a product intervention order would not apply to a financial product that had already been acquired.

“Just as a product intervention order cannot apply to conduct that occurs after a financial product has been acquired, so too should the distribution obligations not apply to conduct that occurs after an acquisition has occurred,” the Law Council submission said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS