ASIC Deputy Chair Karen Chester said, ‘The product intervention power is an incredibly important addition to ASIC’s regulatory toolkit. It allows us to intervene where we are satisfied that a product (or class of products) is likely to result in significant consumer detriment. The power enables us to confront, and respond to, harms in the financial sector in a targeted and timely way. But there are important checks and balances – it is a temporary intervention power and we must consult before each and every use.
‘Over time the targeted solving of problems through product intervention may result in less regulation of industry overall. In recommending the power, the Financial System Inquiry identified the objective of limiting or avoiding the future need for more prescriptive regulation.’
Ms Chester concluded, ‘The availability of this power to protect consumers from products that result in significant harm is particularly timely now, when so many are facing uniquely challenging circumstances with the impact of COVID-19. We have already used the product intervention power in relation to a short-term credit product and have consulted on the use of the power in relation to other products.’
Regulatory Guide 272 Product intervention power (RG 272) sets out:
- the scope of the power, including products that can be subject to an intervention order and the types of orders ASIC may consider making
- when and how ASIC may exercise the power, including how we may determine when consumer detriment is significant and how we may intervene
- the process for making an intervention order, including how we may consult with affected parties, when an order will commence, the process by which an order can be extended, amended or revoked, and the consequences of breaching an order.