An Australian financial services licence should be a privilege and not a right, according to Australian Securities and Investments Commission (ASIC) Chairman Greg Medcraft.

“If you are responsible for other people’s money that is a privilege,” he told the Parliamentary Joint Committee on Corporations and Financial Services.

Mr Medcraft discussed media commentary around Peter and Anne-Marie Seagrim, directors of a financial planning business that directed clients to invest in Trio Capital, which later collapsed.

The Seagrims had been banned from giving financial advice but continued to work as directors.

“You can be banned from financial services, but you can still be a director of a financial services company, which is quite an interesting issue,” Mr Medcraft said.

Commissioner Peter Kell said ASIC is deciding how to approve codes of conduct under the FOFA reforms and will release a consultation paper “early-ish in the second half of the year”.

He says ASIC is discussing the process of establishing codes with various industry bodies.

“The potential there is for these codes to play a significant role in lifting the standards and embedding a professional culture.”

Mr Kell mentioned ASIC’s action against medical indemnity insurer Avant Insurance, saying that significantly inaccurate or misleading product comparisons raise concerns for ASIC, mislead consumers and undermine market competition.

“That is something that we seek to crack down on,” he said. “We are also wanting to ensure that the insurance industry understands our approach to some of the marketing issues that arise in this area.”