The Australian Securities and Investments Commission (ASIC) will delay the start of product design and distribution rules by six months following the Federal Government’s decision to defer the implementation of Hayne royal commission reforms.

The product laws, due to start on April 5 next year after a two-year transition period, will now come into effect on October 5.

ASIC says the delay is consistent with the Government announcement on Friday and allows industry participants to focus on immediate priorities and the needs of customers amid the COVID-19 outbreak.

“In making this decision, ASIC also had regard to the important protections for consumers that these requirements introduce,” it says. “We expect entities will continue preparing for commencement on the extended timeline.”

ASIC will still work towards releasing final guidance on the reforms around the middle of this year in response to industry requests for it to be provided as soon as possible.

Treasurer Josh Frydenberg said on Friday that royal commission-related measures planned for introduction into Parliament by June 30 would now enter the House of Representatives by December. Reforms due for introduction by the end of the year will be scheduled by the following June.

The new timetable has been welcomed by the Insurance Council of Australia, which had proposed a longer delay, and consumer groups who were concerned about the potential length of any suspension.

“The additional time recognises that insurers, like the rest of the Australian economy, have been seriously affected by COVID-19,” ICA spokesman Campbell Fuller told insuranceNEWS.com.au.

“Rather than prepare for regulatory change, they have had to focus resources on supporting policyholders through the aftermath of the recent season of natural disasters and the impact of COVID-19.”

Consumer Action Law Centre Director of Policy and Campaigns Katherine Temple says the group supports the introduction of Hayne reforms “sooner rather than later” but recognises the impact of current extraordinary events.

“we understand the Government has had to reprioritise in the short-term and we think six months is a reasonable compromise,” she told insuranceNEWS.com.au.

But the group is against the decision to delay the start to the product design and distibution obligations.

"It is one thing to delay the introduction of legislation when Parliament isn't sitting, it is quite another to delay enforcement of existing laws," Ms Temple said. "We support the original time frames for the design and distribution obligations, which were already generous."