Design & Distribution Bill: A Reflection of the Current “Consumer-Centric” Climate
Australian Treasury Releases Draft Bill on Consumer Data Right

Design & Distribution Bill: A Reflection of the Current “Consumer-Centric” Climate

By Jim Bulling, Daniel Knight and Elise Hamblin

Misaligned advisor interests.  Consumer disengagement.  Low financial literacy in the face of complex documents.

These themes echo throughout the revised Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Power) Bill (Bill) released by the Australian Government in late July 2018.  These issues have also been recently ventilated in the Banking Royal Commission. Key changes to the Bill include expanding the scope of regulated products and criminal penalties have been increased for certain breaches.

While the protection of consumers lies at the heart of this Bill, it poses real challenges for issuers and distributors.  In particular, the Government’s power to stop distribution of financial products raises significant practical difficulties.  Moreover, the increased criminal penalties are indicative of the seriousness with which breaches will be treated.  While the changes will not come into force for at least two years, distributors and issuers should begin preparing for the implications of this Bill now.

Please see our latest thinking on the K&L Gates HUB here for an in-depth consideration of the revised Bill.

Australian Treasury Releases Draft Bill on Consumer Data Right

By Jim Bulling, Daniel Knight and Felix Charlesworth

On 15 August 2018, Treasury opened consultation on the Treasury Laws Amendment (Consumer Data Right) Bill 2018 (CDR Bill).  The CDR Bill broadly sets out the legislative framework for providing consumers with the right to access to specified data held in relation to them by businesses and authorises secure access to this data by certain accredited third parties.

The initial application for the CDR Bill will relate to the access of banking data (as known as Open Banking).  However, the CDR Bill also empowers of the Minister to determine which other sectors of the Australian economy to which this legislation will apply to in the future.  As stated in the explanatory memorandum for the CDR Bill, the Government has committed that the telecommunications and energy sectors will soon also be subject to the CDR Bill.

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