The Australian Securities and Investments Commission (ASIC) will ban products only as a last resort, according to Chairman Greg Medcraft.

“I know some commentators have been worried ASIC would use its powers to ban products, and this would affect innovation and competition,” he told a banking conference in Brisbane on Friday.

“We think such a power would not stifle innovation that has a positive impact on consumers.

In fact, banning products would be very rare and would occur only in the most extreme circumstances.”

Mr Medcraft was referring to the Financial System Inquiry recommendation that ASIC should have the power of product intervention when consumers are at risk.

“Most interventions would likely fall well short of product banning. We might… require amendments to marketing materials, or additional warnings.

“In more extreme cases we might… require a change in the way a product is distributed or, in rare cases, ban a particular product feature.”

Mr Medcraft says product intervention powers must be transparent and have clear guidelines and accountability mechanisms.

“Both industry and regulators have a common interest in seeing innovation that fosters consumer trust and confidence, but does not harm them,” he said.