The “shifting sands” of regulatory approaches have resulted in financial services legislation that is unwieldy and extraordinarily complex, the Australian Law Reform Commission (ALRC) says in a background paper.

The paper says shifts over time have seen individual citizens shouldering a greater degree of risk, while the financial sector has become a larger part of the Australian economy.

ALRC’s paper says financial services laws have changed to address the risks facing consumers, with “adequacy of disclosure” emerging as a key plank over the two decades since the start of the Corporation’s Act.

The paper says the Murray Inquiry report, published in 2014 also recommended the design and distribution obligations and regulatory product intervention powers after the inadequacy of disclosure began to be recognised.

Reforms attributable to efforts to address various kinds of risks have seen the Corporations Act balloon from 1866 pages in 2001 to 3900, with a commensurate increase in accompanying regulations and legislative instruments, the paper says.

“New law has simply been added to the old,” it says. “The accretion of law has reflected varied approaches to risk, but there has been little desire to revisit or dismantle what came before.”

The background paper is the fifth in a series released by the ALRC as part of a three-year inquiry aimed at reducing the complexity of Australia’s financial services laws and regulations.

The second interim report is due by September 30 and a third focusing on potential reframing or restructuring of Chapter 7 of the Corporations Act is due by August 25 next year. A final consolidated report will be submitted by November 30 next year.