The Australian Securities and Investments Commission (ASIC) could order businesses to immediately act to prevent licence breaches under proposed enhanced enforcement powers.

The ASIC Enforcement Review Taskforce says current arrangements may leave consumers at risk while the regulator must undertake surveillance and hearings before it can suspend, cancel or alter a licence.

“To the extent practicable, ASIC should be able to require compliance with Australian financial services or credit licence obligations in real time,” the taskforce says in a positions paper.

“The regulator should be given power to direct licensees to take or refrain from taking actions where appropriate for this purpose.”

The report also highlights problems when a licensee has taken some steps, but not enough action, to address ASIC concerns.

“The proposed directions power would allow ASIC to take steps to protect consumers by preventing harm before the damage is done,” Revenue and Financial Services Minister Kelly O’Dwyer says.

The taskforce says ASIC should have the power to immediately order a licensee to stop appointing authorised representatives or accepting new clients.

Under the proposals, the regulator could demand an audit, require a licensee to engage qualified compliance staff, cease transferring business to another licence and stop making specific representations about products and services.

ASIC could apply to a court to enforce its directions if a licensee does not comply.

The positions paper, which follows recommendations from the Financial System Inquiry, is the last of eight papers to be released by the taskforce. A final report is due at the end of this month.

Submissions on the enhanced directions powers are due by November 20.