The Australian Securities and Investments Commission (ASIC) has issued a reminder to all financial services and credit licensees, including mortgage brokers, to join the Australian Financial Complaints Authority (AFCA), a new external dispute resolution (EDR) body that combines the Financial Ombudsman Service, the Superannuation Complaints Tribunal, and the Credit and Investments Ombudsman.
The deadline to register with AFCA is Friday, 21 September 2018.
ASIC has stated that it is closely monitoring membership lists with AFCA and will be following up with firms who miss the deadline.
The corporate regulator has also warned that financial firms who do not apply for membership could lose authorisation to act as financial services and credit representatives as they would be in breach of the law.
ASIC, which approved AFCA’s Complaint Resolution Scheme Rules and the Terms of Reference of AFCA’s independent assessor earlier this month, further noted that it is finalising “an instrument which allows firms an extended period to notify ASIC about their AFCA membership details”.
Financial services and credit reps will be able to update their details between 1 and 30 November 2018, the regulator said, but reiterated that this extension does not apply to obtaining memberships.
Last month, the broking industry had flagged that new-to-industry brokers were being prevented from joining aggregators or becoming accredited with lenders as a result of a hiatus in the issuance of certificates of ASIC-approved EDR body.
Despite some brokers saying that they have been waiting for more than a week to receive the required certificate and that they have been in communication with AFCA about it, a spokesperson told Mortgage Business sister title The Adviser that once a membership application has been submitted via AFCA’s website, a confirmation email will “normally” be sent within three to five business days.
This confirmation email was said to be “sufficient to meet [the broker’s] EDR scheme obligations”; however, some aggregators have disputed this, highlighting that they need membership numbers and expiration dates, among other details, which are only provided in certificate confirmations.
Several members of the finance and mortgage industry had also said in August that the transition from three EDR schemes to one will result in some members being “double-charged”, which could cost the industry millions of dollars.
AFCA is set to commence operation on 1 November with around 550 staff members and expects to receive 50,000 complaints within its first year.
Speaking at the recent National Small Business Summit, the CEO of AFCA, David Locke, commented that the authority has “tremendous data” on financial services organisations at its disposal due to the “tens of thousands of disputes that are coming through”, and that this will help it to identify systemic issues.
“We already do work identifying where there are systemic issues and actually working with ASIC to put in place remediation schemes in respect of those,” Mr Locke added.
Tas Bindi is the features editor on the mortgage titles and writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.