Law reform body sets out vision for financial services overhaul
The Australian Law Reform Commission has proposed a shake-up of financial services laws it says are convoluted, a “tangled mess”, costly to comply with and unnecessarily difficult to enforce.
Its final report after a three-year inquiry makes 58 recommendations.
“Parts of the legislative framework have variously been described as ‘porridge’, ‘obscure and convoluted’, ‘shrouded in obfuscation’, and likened to a maze,” a summary says.
The commission has already released three interim reports, with 13 recommendations implemented in full or in part by legislation passed last year.
“The reforms outlined in this [final] report will make these laws easier to understand and navigate, drive down the costs associated with complying with the law, and make it easier for consumers to understand and enforce their rights,” commission President Mordy Bromberg said.
The proposals include a “Financial Services Law” becoming the primary legislation containing key regulatory provisions, and appearing as Schedule 1 of the Corporations Act.
The Financial Services Law would not replace every piece of primary legislation that currently regulates financial services, with other separate laws including the Insurance Contracts Act.
“However, compared with the existing legislative framework, the Financial Services Law would provide a clear home for the primary legislation that applies generally to financial products and financial services,” the report says.
The commission says it is likely policy developments affecting financial services “will continue apace” and the proposed new framework should be better able to adapt to changes.
Recommendations include that the Federal Government establish a specifically resourced taskforce, or taskforces, to oversee introduction of the changes.
The report is available here.