ASIC affirms new external dispute resolution body rules
ASIC’s approval marks another milestone towards the AFCA scheme’s commencement on November 1, 2018.
In line with previous guidance, the Australian Securities and Investments Commission (ASIC) said earlier today that it had approved the Australian Financial Complaints Authority (AFCA) Complaint Resolution Scheme Rules and the Terms of Reference of the AFCA Independent Assessor (IA).
Let’s recall that AFCA is a new external dispute resolution body that is set to start its work in November 2018. Australian financial services providers are advised to pay attention to AFCA’s updates as membership in this new body is mandatory.
‘ASIC’s approval marks another milestone towards the AFCA scheme’s commencement on 1 November 2018,’ said ASIC deputy chair Peter Kell.
ASIC reminds financial firms dealing with retail clients that they must join the AFCA scheme by September 21, 2018.
Almost all Financial Ombudsman Scheme members have effectively transferred their membership to AFCA. Approximately 80% of members of the Credit and Investments Ombudsman Scheme and about 64% of superannuation trustees and retirement savings accounts providers have also joined up.
Let’s also note that AFCA has recently released an updated guidance for financial firms on how to let their customers know about AFCA. From September 21, 2018, AFCA members must ensure that IDR final response letters and ‘delay letters’ include references to both the relevant predecessor external dispute resolution (EDR) scheme (which will be able to receive complaints only up until 31 October 2018) and AFCA (which will be able to receive complaints on and after 1 November 2018).
Between November 1, 2018 and February 1, 2019, such letters may continue to include references to both the predecessor EDR scheme and AFCA, provided it is clear that only AFCA can receive complaints after November 1, 2018.
On or after February 1, 2019, such letters must include references to AFCA but not the predecessor EDR schemes.