The new dispute resolution scheme is on track to begin taking complaints at the start of November, as required financial firms have a little over a week to sign up.
The Australian Financial Complaints Authority (AFCA) reached a major step yesterday (12 September), as ASIC approved its rules and terms.
As overseer of the new scheme, ASIC was required to approve material changes.
The new scheme was given final approval by the minister for revenue and financial services back in May.
AFCA will provide a single scheme in resolving disputes with banks, insurers, super funds and small amount credit providers.
It will replace the two existing ASIC external dispute resolution schemes (EDR), 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 EDR, must be signed up to AFCA by 21 September.
ASIC deputy chair Peter Kell said the latest approval was a milestone towards AFCA’s commencement.
He added, “The approval of the AFCA Rules and the IA Terms of Reference follow a period of public consultation and feedback, and both AFCA and ASIC appreciate the timely contributions from industry and consumer representatives to that process. Further material changes to the AFCA scheme will also need to be approved by ASIC.”
The chair of the board of AFCA, the Hon. Helen Coonan, also welcomed ASIC’s approval.
She said, “AFCA will provide consumers and small business with access to fair, free and independent complaint resolution.
“We look forward to working with ASIC, and consumer, small business and industry stakeholders in implementing this important reform, which will assist in restoring trust and confidence in the financial services industry.”
Almost all Financial Ombudsman Scheme members have effectively transferred their membership to AFCA.
About 80% of members of the Credit and Investments Ombudsman Scheme and about 64% of superannuation trustees and retirement savings accounts providers have also joined up.