It is Federal legislation introduced to bring various financial services and products under one licensing regime. It introduces a new disclosure regime for most financial products and establishes a standard of conduct for financial service providers with the aim of increasing the level of compliance and competency in the financial service industry. The regulatory framework covers a wide range of financial products including securities, derivatives, general and life insurance, superannuation, deposit accounts and means of payment facilities.
The National Protection Act 2009 establishes a single, standard, national system for the regulation of credit. As part of this, state and territory governments have adopted the National credit code, which improves consumer protection for a wide range of credit activities by requiring: credit transactions be standarised across Australia, responsible lending to ensure that consumers are not enticed into credit contracts they can not afford, information to be presented in a clear and easy to-understand format, lenders not to increase credit card limits to customers who they know would find it difficult to manage a higher limit, the stopping of exploitative practices by predatory lenders, such as using household items as security for cash loans, lenders to truthfully disclosure all fees, commission and interest rates in a written contract. The code also protects consumers if they get into difficulty with their credit. For example, if one loses their job or are sick, they can ask to have their contract changed so that they can better meet their repayments.
In 2012, the Future of Financial Advice package Legislation was passed by the federal government , which provides greater protection for investors by tightening up on the: duties and commission payments of financial planners and types of products they are allowed to recommend to customers. FoFa requires financial advisers to send a renewable notice to their customers every two years.
