ASIC releases updated Regulatory Guide on internal dispute resolution


3 August 2020


ASIC has released its long-awaited Regulatory Guide 271: Internal dispute resolution (RG 271) which governs the internal dispute resolution (IDR) policies and procedures applying to financial firms, including Australian financial services licensees.

This updated guide aligns ASIC’s IDR requirements with the statutory regime introduced by the Treasury Laws Amendment (Putting Customers First - Establishment of the Australian Financial Complaints Authority) Act 2018 (Cth).  It forms part of ASIC’s bid to improve the way that consumer complaints are dealt with across the financial services industry and to make complaints handling performance transparent.  Key areas of focus include the fair and timely resolution of complaints and the elimination of systemic issues.

RG 271:

  • introduces reduced IDR timeframes for responding to different types of complaints, including superannuation complaints;
  • sets out minimum content requirements for written IDR responses, to allow complainants to decide whether to escalate their complaint;
  • requires Boards and owners of small financial firms to set clear accountabilities for complaints handling functions, including management of systemic issues; and
  • sets out ASIC’s IDR standards, to be adapted by financial firms depending on the nature, scale and complexity of their business.

The new standards and requirements are relevant to AFS licensees for the purpose of meeting the dispute resolution requirements under s 912A of the Corporations Act 2001 (Cth).  They will also apply more broadly to trustees of regulated superannuation funds (other than self‑managed superannuation funds) for the purpose of meeting the dispute resolution requirements under s 101 of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act).

Some additional points to note, particularly for superannuation trustees, are:

  • the definition of “complaint” will include expressions of dissatisfaction about an organisation or its staff, along with expressions legally requiring a response; and
  • complaints made on social media will need to be treated as legitimate and dealt with under a financial firm’s IDR procedure.

 

Timing

RG 271 comes into effect on 5 October 2021, after which time industry participants must comply with the new IDR standards and requirements.

Until 5 October 2021, RG 165 Licensing: Internal and external dispute resolution will continue to apply to AFS Licensees.  Similarly, we expect the transitional provisions under s 101 of the SIS Act will continue to apply for superannuation trustees (regarding giving written reasons) until RG 271 comes into effect.

ASIC is expected to publish a legislative instrument reflecting the new IDR standards’ enforceable nature shortly, and release further guidance on data collection matters upon completing targeted consultation this year.

 

Contact us

If you have any queries about the new IDR standards and requirements or would like to discuss and review your arrangements, please do not hesitate to contact us.

 

 

This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.

 

 

Authors:

Tasha Naige, Senior Associate in our Transactions Team

Contact
Email:  tnaige@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2244

 

Annabel Nettle, Lawyer in our Disputes Team

Contact
Email: anettle@dmawlawyers.com.au
Direct Telephone: +61 8 8210 2291