A “broad, flexible” approach is the Australian Securities and Investments Commission’s (ASIC) preference if it is granted product intervention powers.

Consultations continue on the proposal, which is part of regulatory reforms designed to restore public trust in the financial services sector.

“Ideally, this will be a broad, flexible power that will enable ASIC to intervene in relation to all products within our jurisdiction, with a range of interventions including where features such as remuneration structures are of concern to us,” Deputy Chairman Peter Kell said.

“With a flexible power ASIC would be able to take the least interventionist approach possible in the circumstances to achieve the right market outcomes.

“Banning a product outright may, in exceptional circumstances, be warranted, but the right [product intervention powers] will enable a more graduated approach to regulation.”

Another government reform – product design and distribution obligations – means issuers and distributors can no longer blame each other when things go wrong.

They must ensure products are in customers’ best interests.

“The reform signals that responsibility for good consumer outcomes lies right across the supply chain,” Mr Kell said.

“Product issuers and distributors would be obliged to consider the type of consumer whose financial needs would be addressed by buying the product in question, and the channel best suited to distributing the product.”