With the Treasurer due to deliver the Government's response to the Financial System Inquiry in the next few weeks, Australian Securities and Investments Commission chairman Greg Medcraft has made a final pitch for the increased regulatory powers recommended by the FSI.The Inquiry recommended that ASIC have a new "product intervention" power, that issuers be required to comply with product "design and distribution" obligations, and that penalties for contravening ASIC regulations be substantially increased.Speaking at a Banking and Financial Services Law Association conference in Brisbane on Friday, Medcraft said: "I see these three recommendations as complementary. They are an important next step towards ensuring trust and confidence in the market."The product intervention power would allow ASIC to require amendments to marketing and disclosure materials. The regulator could require consumer warnings and changes to labelling and terminology. It would also have the power to ban a product.The power could be used against an individual company or class of companies in relation to a product or class of products. Currently, ASIC can only take action to rectify consumer detriment after a suspected breach of the law.It can only take enforcement action against conduct causing consumer detriment on a company by company basis, even where the problem is industry-wide.Medcraft said: "A product intervention power would give ASIC a greater capacity to apply regulatory interventions in a timely and responsive way."On the design and distribution obligations, the FSI recommended that a broad, principles-based obligation be imposed on financial institutions to have regard to the needs of their customers in designing and targeting their products. Medcraft said: "Product manufacturers should design and distribute product with the best interests of the investor and financial consumer in mind."On the issue of penalties, Medcraft said: "The maximum civil penalties available to us in Australia are lower than those available to other regulators internationally. And they are fixed amounts, not multiples of the financial benefit obtained from misconduct."Penalties need to give market participants the right incentive to comply with the law."