The Australian Securities and Investments Commission (ASIC) today issued guidance on how to manage its product intervention power.
17 June, 2020 | AtoZ Markets – ASIC published draft guidance on product intervention for consultation in June 2019. ASIC received 28 submissions from industry associations, consumer organizations and financial companies. ASIC used the power to ban short-term credit products. This guide also provides an overview of product intervention power:
- In which sector, ASIC can exercise product intervention power
- When and how the ASIC can exercise the power
- How product intervention orders are made
ASIC Released New Regulatory Guide on Product Intervention
ASIC has published a new regulatory guide on managing product intervention powers. The ASIC also explains that it can issue an intervention order if it determines that the product has or is likely to cause a significant disadvantage to the consumer. ASIC Deputy Chair Karen Chester also said:
‘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 power in relation to other products.’
The duration of the product intervention order depends on the circumstances of the case. ASIC can also place initial orders for up to 18 months from the effective date. It can extend or make permanent with the approval of the Minister.
“We can extend a product intervention order for a set period of time or make the intervention permanent. We can extend an order multiple times, but each extension requires the approval of the Minister, after considering a report on the matter from us,” the regulator also said.
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