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ASIC caves in to mortgage brokers.



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M E D I A R E L E A S E

Senator Stephen Conroy Deputy Opposition Leader in the Senate Shadow Minister for Financial Services

ASIC CAVES IN TO MORTGAGE BROKERS

ASIC’s decision to exempt mortgage brokers, who provide or advise on offset accounts, from the financial services reform regime (“FSR regime”) will undermine the regulatory framework applying to the financial services industry.

The Australian Securities and Investments Commission (ASIC) has granted class order relief for mortgage brokers from the licensing requirements under the under the Corporations Act 2001 in relation to off-set accounts, on the condition that the provider is a member of an eligible external dispute resolution scheme (EDR scheme).

In Labor’s view, off-set accounts are financial products and therefore anybody who is advising on them or dealing in these products should be subject to the FSR regime (even though they are linked to credit facilities which do not fall within the FSR regime).

Consumers have been left with significantly less protection when dealing with mortgage brokers now that off-set accounts are outside the scope of the FSR regime.

Labor is concerned that the Government’s and ASIC’s willingness to cave into the mortgage brokers (as well as other interest groups) is undermining the consistency of regulation in relation to financial services and that the FSR regime will end up with as many holes as a Swiss cheese.

Wednesday, 10 December 2003

Further information: Stephen Conroy 0418 383 965 Amber Hawkins 0407 434 523