New bill sends warning bells
The Senate Economics Committee has recently recommended Treasury's proposed Design and Distribution Obligations and Product Intervention Powers Legislation, which signals some of the most significant reforms to the financial services industry in decades, should pass through Parliament.
In the August edition of Fundamental, we wrote about the concerning impact of these proposed changes which involve requiring product issuers to identify a 'target market' to whom their products may be issued/advertised, and giving ASIC product intervention powers if there is a risk of significant consumer detriment.
In short, these changes mark a fundamental shift in the way products for the retail market are developed and sold. It is also likely to mean fewer products available to the retail market which already struggles to access good quality investments.
The Legislation is still with the House of Representatives and we will keep you up to date with further developments.