The implementation of the FSI Report's recommendation to award ASIC with product intervention powers would ultimately give additional protection to SMSF trustees, according to South Australian Senator David Fawcett.
In a presentation at the SMSF Association conference in Melbourne yesterday, Mr Fawcett said the adoption of the recommendation will allow ASIC to take a more proactive approach towards products rather than reacting after an error has already occurred.
Mr Fawcett said while this proactive approach is unlikely to be like the "Therapeutic Goods Administration where every product gets [a] stamp of approval," it will be similar to the aviation industry where "everyone gets on an aircraft and they don't expect it to be the fastest or [perform] aerobatics but they do expect to get there safely every time".
"Whereas for someone who wants more extreme performance or wants to fly in the experimental category, the degree of disclosure around the risk associated with that [will be] mandated by the regulator," he said.
Mr Fawcett said frameworks around design criteria and disclosure will most likely be the ways the government will look to make product regulation more proactive.
"We're concerned about the individual adviser but we're also concerned about the product they're dealing with, how suitable it is, we're also concerned about the culture of the companies they work with and we're concerned about the regulator," said Mr Fawcett.
"We look at things like the potential product intervention as one of those additional defences."
Mr Fawcett said the recommendations of the FSI Report, the Parliamentary Joint Committee and existing government policies will all have an impact on the SMSF sector.
"It opens the door for SMSF practitioners, gatekeepers to be seen as a profession in their own right."
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