Addressing the Contrasting Definitions of Financial Product and Financial Service in Australian Financial Services and Consumer Legislation

There is a general consensus that the legislative framework for financial services is complex and unwieldy. Contributing to this complexity are the contrasting definitions of financial product and financial service in the ASIC Act and the Corporations Act. The different definitions between the two statutes, and within the Corporations Act, are unnecessarily complex, imposing costs and other difficulties on regulators, businesses and consumers seeking to understand their obligations and/or enforce the law. This article proposes that Pt 2 Div 2 of the ASIC Act be repealed, and the carve-out of financial services from the Australian Consumer Law be removed. This would obviate the need for definitions of financial product and financial service in the ASIC Act and ensure that the consumer protection standards in the Australian Consumer Law apply to all sectors of the economy. Future work should also examine the merits of a stand-alone consumer financial services statute covering both credit and other financial services.