ASIC, Regulation

Legacy complaints now under AFCA’s remit

The Australian Securities and Investments Commission (ASIC) has approved amendments to the rules governing the Australian Financial Complaints Authority (AFCA) allowing the grievance body to deal with legacy complaints raised with but not resolved by predecessor schemes.

The federal government has stipulated the AFCA scheme must be available for financial harm suffered by individuals or businesses dating back to 1 January 2008. This approval will allow the new complaints body to deal with outstanding matters brought against current member financial organisations going back to this date.

The new rules were approved by the corporate regulator under section 1052D of the Corporations Act, which requires AFCA to seek ASIC approval of any changes made to the financial services complaints scheme.

For a legacy complaint to be heard and managed by AFCA, the government has specified the action must relate to a compulsory member of the AFCA scheme that was a member when the issue was raised, must not be an excluded complaint and is lodged between 1 July 2019 and 30 June 2020.

In addition to the ASIC approval, operational guidelines as to how AFCA deals with legacy complaints have been released.

It has been noted new issues may arise from the management of these legacy complaints that may require further material changes to the AFCA scheme.

Should these circumstances present themselves, ASIC will again be required to review any necessary amendments as part of its ongoing oversight role.

ASIC has previously approved the rules under which AFCA operates.

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