ASIC consults on oversight of AFCA, update to RG 139

ASIC has started a consultation process on its oversight of the Australian Financial Complaints Authority (AFCA).

The AFCA is the new external dispute resolution body for financial services, replacing the SCT, CIO and FOS.

The Minister for Revenue and Financial Services, Kelly O’Dwyer, has announced that AFCA will start operations no later than 1 November 2018.

ASIC said that there were a number of transitional steps that need to occur before AFCA commences, including the Minister authorising AFCA and the AFCA Board consulting on the scheme’s terms of reference.

ASIC’s consultation includes if firms require any transitional relief from the external dispute resolution disclosure obligations.

“ASIC is issuing draft updated RG 139 [Regulatory Guide 139 Approval and oversight of external complaints resolution scheme] 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.”

“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.”

“It also aligns with the new legislative requirements in the AFCA Act.”

ASIC said it would finalise this guidance to coincide with the commencement of AFCA, “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.”

Minister O’Dwyer welcomed the public consultation process.

“ASIC’s draft guidance is another important step in establishing the AFCA — a new one-stop shop for external dispute resolution in the Australian financial system,” said Minister O’Dwyer.

“We are putting the governance processes in place so the AFCA is ready to start receiving consumer and small business disputes no later than 1 November 2018.”

“The draft regulatory guidance sets out ASIC’s approach and I encourage all stakeholders to be involved in this important consultation process.”

The consultation period ends on 6 April 2018.

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