Important information about transition
The Australian Financial Complaints Authority (AFCA) will replace the Credit and Investments Ombudsman (CIO), Financial Ombudsman Service (FOS) and Superannuation Complaints Tribunal (SCT). The Bill to establish AFCA was passed in Parliament in February 2018.
The Minister for Financial Services, Hon Kelly O’Dwyer MP stated that AFCA would be operational from 1 November 2018 via media release. Following AFCA's authorisation, the Minister appointed the Hon Helen Coonan as the inaugural Chair of AFCA as well as the remaining minority directors. Mr David Locke will serve as AFCA's Chief Ombudsman and Chief Executive Officer.
CIO is actively participating in the transition process and has engaged with ASIC, FOS and the Treasury transition team to ensure the smooth transition to AFCA and to secure the transition of CIO members and staff to AFCA.
The Australian Securities and Investments Commission (ASIC) has issued a media release reminding licensees and credit representatives of their obligation to comply with their external dispute resolution (EDR) requirements despite the establishment of AFCA. ASIC will work with Government and scheme stakeholders to ensure a seamless transition to the commencement of AFCA. In the interim, ASIC will retain direct oversight of the two ASIC-approved schemes – CIO and FOS. (Separate arrangements are in place for the ongoing operation of the SCT to enable it to deal with existing complaints.)
Broader jurisdiction, new monetary limits, and compensation caps
AFCA will apply a new definition for small business (any business with fewer than 100 staff), extending the current jurisdictional limits of EDR.
AFCA will have the following monetary limits and compensation caps:
Key dates and obligations for FSPs
FSPs, including existing members of CIO and FOS, must become AFCA members by 21 September 2018. They must also retain their existing membership of CIO or FOS until further notice. FSPs must keep paying fees to CIO or FOS as and when they fall due.
AFCA will commence accepting complaints from 1 November 2018. Consumers will be able to lodge complaints with CIO or FOS up to and including 31 October 2018.
ASIC has announced it will give financial firms, including superannuation trustees, transitional relief until 1 July 2019 to allow them time to update mandatory disclosure documents and periodic statements with the contact details of AFCA.
We are working closely with AFCA to facilitate a seamless transition for our Members from CIO to AFCL. No action has to be taken at this point. Further details will be provided to Members by email in due course.
For any queries relating to the transition, please contact our membership office on 02 9273 8455 or email us.
A memorandum of understanding between CIO and FOS will prevent members moving between the schemes in the transition period. (The only exception is where a credit representative requires membership from the other scheme because its new licensee is a member of that other scheme.)
In the interim, ASIC will retain direct oversight of the two ASIC-approved schemes – CIO and FOS. (Separate arrangements are in place for the ongoing operation of the SCT to enable it to deal with existing complaints.)
Independent Chair - Hon Helen Coonan
Ms Carmel Franklin
Ms Elissa Freeman
Ms Catriona Lowe
Ms Erin Turner
Mr Alan Wein
Mr Robert Belleville
Ms Jennifer Darbyshire
Ms Claire Mackay
Ms Johanna Turner
Mr Andrew Fairley AM