ASIC urges financial services licensees to join new dispute resolution body

The Australian Securities and Investments Commission (ASIC) published a statement earlier today reminding financial services firms working with retail clients of the deadline to join the new external dispute resolution body – the Australian Financial Complaints Authority (AFCA). All Australian financial services licensees, Australian credit licensees, authorised credit representatives and superannuation trustees must join AFCA no later than September 21, 2018.

Financial firms that do not register will be in breach of the law, ASIC warns. The Australian regulator says it is closely monitoring membership lists with AFCA and will be following up with firms that fail to meet this deadline.

ASIC is finalising an instrument which allows firms an extended period to notify ASIC about their AFCA membership details. Firms will be able to update their details between November 1st and 30 November 30^th. This, however, does not extend the period for joining AFCA.

Earlier this month, ASIC approved the AFCA Complaint Resolution Scheme Rules and the Terms of Reference of the AFCA Independent Assessor (IA).

Let’s 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.