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FSC opposes product provider obligation

The FSC has welcomed a number of Murray Inquiry proposals but stopped short of endorsing the call for a new conduct obligation on financial product manufacturers.

In its submission to Treasury responding to the FSI final report, the lobby group rejected the proposal of a product design and distribution obligation, arguing this new conduct requirement is “unnecessary”.

“[The proposal is unwarranted] given existing multi-layered obligations on financial services providers; implementation risks associated with the proposed obligation; the significant compliance burden it would impose; and the negative impact such an obligation would have on consumer autonomy and choice,” the submission stated.

Equally, it rejected the FSI recommendation to arm ASIC with product intervention powers, which it says could see the regulator “stray into the field of mandating permissible products”.

The FSC also endorsed higher education standards for financial advisers and an enhanced ASIC register, including disclosure of licensee ownership.