Australian Parliament Approves Creation of Financial Complaints Authority

The Australian Parliament has officially passed a Bill, approving the establishment of the Australian Financial Complaints Authority (AFCA).

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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.

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AFCA’s Role

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 Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term).

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.