Will ASIC's proposed powers survive? The Government's FSI response risks death by consultation

With few initial details and extensive consultation promised, the Government's plan to give ASIC new enforcement tools is highly ambitious.

In what would be a comprehensive shake-up of the existing regulatory regime, the Government's FSI response proposes giving ASIC sweeping new powers to ban harmful financial products and ban individuals from managing financial firms.

AFS licensees and Australian credit licensees will also need ASIC approval to effect changes in control.

Industry's cautious support for these reforms to date is qualified by a strong desire to "strike the right balance" between consumer protection and product innovation.

To that end, the Government has promised detailed consultation with stakeholders before implementing any of the reforms.