Update on the Australian Financial Complaints Authority(AFCA)

By Shaun Backhaus ([email protected]), Lawyer and Daniel Butler([email protected]), Director DBA Lawyers

In our previous article on AFCA we explained the background to AFCA’s establishment, what disputes it would apply to and how it would differ from the external dispute resolution schemes it replaced, such as the Financial Ombudsman Service. For further information please refer to our previous article.

AFCA Commencement

In June 2018 AFCA carried out a broad consultation of its proposed rules (‘Rules’) and received feedback provided by the industry. A copy of the Rules and industry submissions can be viewed on AFCA’s website. The Rules were recently finalised and approved by ASIC. Broadly, the Rules explain the dispute resolution process, the requirements that must be met for a complaint to be considered by AFCA, the types of complaints excluded and the remedies available.

All financial firms required to be members of AFCA must be members by 21 September 2018. All financial firms should familiarise themselves with the Rules, the transition requirements and otherwise prepare for AFCA’s introduction. AFCA will begin accepting disputes from 1 November 2018 and is carrying out a number of industry engagement procedures such as webinars to assist in the transition. Complaints made to the previous external dispute resolution schemes will be transferred to AFCA but will continue to be adjudicated under the original scheme’s terms of reference or rules applying to the complaint.

ASIC oversight

ASIC has released Regulatory Guide 267 which sets out how it will perform its general oversight role in relation to AFCA. It outlines ASIC’s powers to issue regulatory requirements, give directions and approve material changes to the Rules and other scheme governance arrangements. It also provides information about AFCA membership obligations such as the requirement to ensure customers are aware that they can bring a complaint to AFCA and the relevant transitional arrangements.

ASIC has announced that it will give financial firms transitional relief until 1 July 2019 to allow them time to update mandatory disclosure documents and periodic statements with AFCA’s contact details.

Related articles

DBA Lawyers has provided a useful guide and resource for advisers without an AFSL or those with an AFSL who wish to provide advice that does not require a license. For more information on DBA Lawyers’ SMSF AFSL Advisers Kit please follow this link: https://www.dbalawyers.com.au/summary-smsf-documents-strategy-kits/non-licensed-afsl-smsf-advisers-kit/. For further reading on the AFSL regime please see:https://www.dbalawyers.com.au/licensing/accountants-new-afsl-regime/

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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional. The above does not constitute financial product advice. Financial product advice can only be obtained from a licenced financial adviser under the Corporations Act 2000 (Cth).

Note: DBA Lawyers hold SMSF CPD training at venues all around. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.

For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.