The Australian Securities and Investments Commission says its code of practice approvals process considers an industry’s response to independent reviews and factors such as enforceability.

The regulator has released an updated guide on its approach to financial services codes, noting the advantages of sectors seeking approval.

“We recognise that codes without ASIC approval (non-approved codes) can also play an important role in lifting industry practice and delivering better outcomes,” it says.

“However, where approval by ASIC is sought and obtained for a code, it is a signal to consumers that this is a code they can have confidence in and rely on.”  

The regulator is more likely to publicly consult on a document if there are major changes, significant differences in views on the content, independent review recommendations are not fully adopted or the industry’s own consultation is insufficient.

Supporting information when a document is submitted should include how independent review recommendations have been adopted, and explanations for proposals not included.

Laws were changed after the Hayne royal commission so regulator-approved codes could also contain enforceable provisions on which ASIC could take direct action, but no code containing that arrangement is in operation.

The regulatory guide is available here.