The Australian Parliament has officially passed a Bill, approving the establishment of the Australian Financial Complaints Authority (AFCA).
The passing of this bill exemplifies the rigorous process that has spanned over 20 months of inquiries in the matter. The establishment solidifies the dispute resolution framework, which was reviewed by an independent panel, headed by Ian Ramsay, who boasts extensive experience and currently serves as a Professor at Melbourne Law School.
The current consensus is that consumers and businesses alike, will have greater resources to resolve future disputes, as a result of higher monetary and compensation limits that will be at the disposal of AFCA upon its establishment.
AFCA will begin accepting and resolving disputes “no later than November 1.” Meanwhile, the regulatory body responsible for monitoring and supervising AFCA will be the Australian Securities and Exchange Commission (ASIC).
Peter Kell, Deputy Chairman of ASIC commented on the passing of the Bill: “Fair, timely and effective dispute resolution is a cornerstone of the financial services consumer protection framework. The combination of firms’ internal dispute resolution procedures and access to a free independent external scheme currently provides redress for many tens of thousands of Australians each year. Strengthening these dispute resolution requirements will help deliver higher standards and better outcomes in the financial services market.”
Mr. Kell added: “The establishment of a single scheme for all financial services and superannuation complaints is a very positive development, building on the outcomes achieved over many years by the existing three schemes: the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.”
ASIC to Oversee AFCA
Until AFCA is officially able to operate fully in the dispute resolution process, ASIC will continue to process complaints and continue to oversee both ASIC schemes FOS and CIO. ASIC will get consultation in the matter of Regulatory Guide 139, which will set out the specifics of ASIC’s supervisory role over AFCA, upon its official commencement of operations.
Current members of both FOS and CIO schemes are required to continue holding their EDR memberships during the transition period.
ASIC has been a steady regulatory authority, continuously issuing warnings, bans, and fines to various financial establishments that either operated without authorization and licensing, or simply did not comply on some level with the regulatory framework put in place by the regulator.