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Tuesday 18 June 2019

19-145MR ASIC approves AFCA Rules change for legacy complaints

ASIC has approved changes to the Australian Financial Complaints Authority (AFCA) Rules which give effect to the AFCA authorisation condition introduced by Government on 19 February 2019.

Under the Government’s additional condition, AFCA is required to give expanded access to the AFCA scheme for consumers and small businesses that were harmed by financial misconduct, dating back to 1 January 2008. AFCA will be able to deal with certain complaints about conduct by current member financial firms, which AFCA, its predecessor schemes, courts, or tribunals have not previously dealt with.

Consistent with the Government’s condition AFCA’s new Rules require that an eligible legacy complaint:

  • relates to a compulsory member of the AFCA scheme who is a member of the AFCA scheme at the time the complaint is made;
  • is not an excluded complaint; and
  • is made during the lodgment period,1 July 2019 to 30 June 2020.

ASIC approved these Rules in accordance with legislative requirements in s1052D of the Corporations Act which require AFCA to seek ASIC approval of material changes to the AFCA scheme.

AFCA has also released updated Operational Guidelines which give further guidance on how AFCA will deal with legacy complaints. The new jurisdiction, which covers complaints about conduct going back to 2008, may raise novel issues about how AFCA deals with complaints. If these issues require or necessitate material changes to the scheme, then ASIC will need to review these as part of our ongoing oversight role.

Background

On 19 February 2019, the responsible Minister made a notifiable instrument: the AFCA Scheme (Additional Condition) Amendment Authorisation 2019 which required AFCA to accept legacy complaints dating back to 1 January 2008. 

Between 18 March and 12 April 2019, AFCA conducted a public consultation on Rules changes necessary to give effect to the requirements in the legislative instrument.

While ASIC has an oversight role over AFCA (including approving material changes) the scheme is independent and responsible for its own internal processes and the management of complaints. ASIC has no role in individual complaints handling (under the AFCA Scheme) and will not intervene in the decision-making processes of AFCA.

Last updated: 18/06/2019 12:00