Second Reading SpeechMr Slipper (Parliamentary Secretary to the Minister for Finance and Administration)
That this bill be now read a second time.
The Financial Services Reform Act 2001 (FSR Act) has put in place a harmonised licensing, disclosure and conduct regulatory framework for financial products, markets and service providers.
These reforms are intended to promote investor protection and improve market efficiency. The reforms embodied in the FSR Act, once fully in place, will deliver significant benefits to both consumers and industry participants.
The FSR Act provides consumers with enhanced protection due to improved conduct and disclosure requirements. The reforms will provide an environment in which investors can be confident that those who provide financial services and products are effectively regulated and have appropriate training, competence, skill and integrity.
The enhanced disclosure regime is designed to ensure that investors will be better able to compare products and services and make investment decisions through the provision of timely, reliable and clear information.
The reforms introduced by the FSR Act also provide significant benefits to industry participants through establishing a common regulatory regime across all financial services. They replace a fragmented patchwork of industry specific arrangements with a uniform framework that allows the provision of innovative financial services and compliance with only one regime across a variety of financial products.
In recognition of the magnitude and scope of the changes and the work entailed in their implementation, existing industry participants were provided a two-year transition period to move into the new regime commencing on 11 March 2002. We are now over halfway through this transition period.
The government, the financial services and consumer protection regulator, the Australian Securities and Investments Commission (ASIC), and industry have all been working together to ensure that transition is as smooth as possible and the benefits of the FSR regime are realised.
The transition period has uncovered certain issues which industry wish to resolve before transitioning to the FSR regime.
The government and ASIC have been working very closely with industry members to clarify such issues. To this end the government has developed several batches of corporations regulations to promote certainty and facilitate industry transition to the FSR regime.
ASIC has also released extensive guidance for industry participants across a wide range of topics, through ASIC policy statements, `frequently asked questions' and information releases.
The work done by the government and ASIC to date does not in any way alter the fundamental framework of the FSR Act it merely clarifies and refines the operation of the regime.
While significant work has been done, some of the issues raised by industry can only be dealt with through amendments to the legislation itself.
The amendments contained in this bill are largely technical in nature, rather than a shift in the policy underlying the FSR Act. That said, many financial industry participants are reluctant to transition to the new regime without the resolution of certain issues dealt with in this bill.
The government believes the initiatives in this bill, along with other steps taken to date, will provide greater comfort and certainty for industry participants to transition into the FSR regime by 11 March 2004.
I commend the bill to the House and present the explanatory memorandum.
Debate (on motion by Mr Snowdon) adjourned.