The Association of Financial Advisers (AFA) has backed the Australian Securities and Investments Commission’s (ASIC) proposed financial services panel – with some conditions.

In a submission to ASIC, the association says an ability for the industry to explain its practices when considering regulatory decisions is to be welcomed.

“This is a positive step towards effective co-regulation and one that financial advisers in particular are interested in participating in,” the submission says. “The AFA considers it is imperative to the success of the panels that ASIC can draw upon a pool of talent with solid experience across the spectrum of each discipline and across financial product types.”

The AFA says it is impossible for one individual to be knowledgeable on every aspect of the financial services industry, so the right mix of panellists must be considered.

It supports including corporate peers and other professionals on the panels because this will improve banning decisions.

“Provided the experience pool can be managed effectively as vacancies arise and conflicts need to be managed, the AFA considers this system should improve regulatory outcomes.”

It argues the panels would improve the integrity of decisions and fairness of hearings, underpinning decisions with real-world experience.

The AFA’s preferred composition is two specialists in a subject, plus the ASIC representative and other industry professionals with relevant knowledge.

“For the panels to be effective there needs to be consistency, legal insight, direct access to surveillance material and appreciation of the range of matters ASIC has dealt with represented on each panel,” the submission says.