Ministerial approval has now been given for the new Australian Financial Complaints Authority (AFCA).
The Minister for Revenue and Financial Services authorised the Australian Financial Complaints Limited (AFCL) to establish and operate the dispute resolution scheme. AFCA will begin accepting new complaints on November 1.
AFCA will replace the two existing Australian Securities and Investments Commission (ASIC) approved external dispute resolution schemes: the Financial Ombudsman Scheme (FOS) and the Credit and Investments Ombudsman (CIO), as well as the statutory Superannuation Complaints Tribunal (SCT).
All financial firms required to hold membership of an external dispute resolution scheme will be required to join AFCA by no later than 21 September.
Ninety-eight percent of current members of the Financial Ombudsman Service (FOS) have already completed the annual assessment and member declaration.
The inaugural AFCA Board, to be chaired by the Hon. Helen Coonan will formally assume responsibility from 4 May for the implementation of the new scheme.
The AFCA Board will comprise the Hon. Helen Coonan, four directors appointed by the Minister and six ongoing directors from the AFCL Transitional and FOS Boards. The directors on the AFCA Board effective 4 May are set out below.
One of the early actions of the new AFCA Board will be to consult stakeholders on the proposed AFCA Rules and on an interim funding model for the new scheme.
As part of the interim funding arrangements, there will be separate and appropriate arrangements for the funding of superannuation disputes. This will be based on using the parameters applied for the current APRA levy calculations.
In a statement supporting the decision, ASIC said, “ASIC welcomes the authorisation by the Minister for Revenue and Financial Services of the operator of the new single external dispute resolution scheme for consumer and small business complaints: the Australian Financial Complaints Authority.
“AFCA will be able to deal with complaints about financial firms including banks, credit providers, insurance companies and brokers, financial advisers, managed investment schemes and superannuation trustees.
“It will operate significantly higher monetary and compensation limits for consumer and small business complainants, as well as provide enhanced access to free dispute resolution for primary producers. ASIC will oversee the operation of AFCA and receive reports including about systemic issues and serious contraventions by financial firms.”
The AFCA Board will continue working with the Credit and Investments Ombudsman (CIO) Board on the necessary arrangements for a transfer of its members and operations to AFCA. AFCA will continue its close collaboration with the Superannuation and Complaints Tribunal (SCT) during the transition process.
In the lead up to the commencement of the AFCA EDR scheme on 1 November 2018, AFCA will be actively engaging with all its stakeholders, including consumer organisations.