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18-062MR ASIC consults on updated guidance for its oversight of the Australian Financial Complaints Authority (AFCA)
ASIC today released draft updated Regulatory Guide 139, Oversight of AFCA (updated RG139) for public consultation.
The Bill to establish AFCA passed on 14 February 2018, and Minister for Financial Services, the Hon. Kelly O'Dwyer has announced that AFCA will commence operations no later than 1 November 2018. There are a number of transitional steps that need to take place before AFCA commences, including that:
- the Minister will authorise AFCA; and
- the AFCA Board will consult on the scheme's terms of reference.
'ASIC is issuing draft updated RG 139 now as we believe that clarity about ASIC's policy approach at this stage of the transition will assist all stakeholders,' said ASIC Deputy Chair, Peter Kell. 'It will also enable ASIC to take into account and respond to any emerging issues that arise during the transition period.'
ASIC will finalise this guidance to coincide with AFCA commencement - that is, no later than 1 November 2018.
There has already been extensive public consultation on these reforms through the progress of the Review of the financial system external dispute resolution and complaints framework led by Professor Ian Ramsay, as well as the release of a Treasury consultation paper on the establishment of AFCA in November 2017.
'Updated RG 139 retains many longstanding policy settings that were considered by the Ramsay Review and endorsed by Government, including the handling of systemic issues and periodic independent scheme reviews,' Mr Kell said. 'It also aligns with the new legislative requirements in the AFCA Act.'
ASIC is consulting for a period of five weeks on a limited number of policy issues. This includes whether firms need any transitional relief from external dispute resolution disclosure obligations. We invite responses to our consultation by 6 April 2018.
Background and transition issues
- The operator of the scheme will be authorised by the Minister, and the scheme will be subject to ongoing oversight by ASIC.
- ASIC will also publicly consult on new IDR standards and the mandatory Internal Dispute Resolution reporting requirements that are also contained in the AFCA legislation, but this consultation will not take place until after AFCA commencement.
- See http://asic.gov.au/about-asic/media-centre/find-a-media-release/2018-releases/18-041mr-asic-welcomes-establishment-of-the-australian-financial-complaints-authority/
- See http://kmo.ministers.treasury.gov.au/media-release/015-2018/