This was the most significant review of AFCA’s Rules and Operational Guidelines since AFCA was established.
The proposed Rules and Operational Guidelines were designed to implement the Review’s recommendations and ensure AFCA continues to provide efficient, timely operations so we can deliver fair, independent and effective solutions for financial disputes. This is consistent with the key themes in the Review Report.
AFCA engaged an external consultant to draft proposed changes to both the Rules and Operational Guidelines for consultation. This helped to ensure the proposed changes responded to the Independent Review recommendations, and were clearly worded and unambiguous.
Any material changes to AFCA’s Rules require approval by both the AFCA Board and ASIC.
Summary of proposed changes
The proposed changes were developed to address recommendations made in Treasury's Independent Review of AFCA – with some additional changes to help ensure our Rules and Operational Guidelines remain accurate, up-to-date and provide clearer guidance about AFCA’s jurisdiction and processes.
Managing conduct within the scheme
|
Proposal |
Reason |
Independent Review recommendation/s |
|---|---|---|
|
Proposal 1: Paid Representatives |
To manage the conduct of fee paid representatives who engage with the scheme and strengthen AFCA’s ability to deliver procedural fairness. |
Recommendation 2: Ensuring all AFCA decisions consider what is fair in all circumstances Recommendation 4: Addressing poor conduct by some paid advocates Recommendation 5: Improving transparency of timeliness and better managing timeliness expectations |
|
Proposal 2: Complainants |
To build greater efficiency and timeliness in complaint handling and manage inappropriate or abusive Complainant conduct and strengthen AFCA’s ability to deliver procedural fairness. |
Appropriate offers of settlement or previously settled matters
|
Proposal |
Reason |
Independent Review recommendation/s |
|---|---|---|
|
Proposal 3: Appropriate settlement offers |
To encourage fair settlement of meritorious complaints at an early stage in AFCA’s process, in order to enhance the timeliness and efficiency of outcomes. |
Recommendation 1: Dealing with further issues raised during the complaint process Recommendation 2: Ensuring all AFCA decisions consider what is fair in all circumstances Recommendation 5: Improving transparency of timeliness and better managing timeliness expectations Recommendation 7: Ensuring funding model design does not disincentivise firms from defending complaints |
|
Proposal 4: Previous settlement agreements |
To support the efficient and timely resolution of complaints. |
How we deal with complaints lodged by sophisticated or professional investors
|
Proposal |
Reason |
Independent Review recommendation/s |
|---|---|---|
|
Proposal 5: Sophisticated and professional investor complaints (Operational Guidelines change) |
To clarify existing approach to exclude complaints from sophisticated or professional investors unless misclassified. |
Recommendation 6: Complaints from sophisticated or professional investors |
Forward Looking Review mechanism
|
Proposal |
Reason |
Independent Review recommendation/s |
|---|---|---|
|
Proposal 6: Forward Looking Review mechanism (Operational Guidelines change) |
To enhance the visibility, accessibility and independence of AFCA’s Forward Looking Review mechanism. |
Recommendation 9: Enhancing visibility, accessibility and independence of the Forward Looking Review mechanism. |
Effect of Determinations and slip rule
|
Proposal |
Reason |
Independent Review recommendation/s |
|---|---|---|
|
Proposal 7: Complainant non-acceptance of Determination |
To support the fair, efficient and timely resolution of complaints and to support AFCA’s continued improvement of its fairness jurisdiction. |
Recommendation 2: Ensuring all AFCA decisions consider what is fair in all circumstances Recommendation 5: Improving transparency of timeliness and better managing timeliness expectations |
|
Proposal 8: Accidental error in a Determination – slip rule |
To support the fair, efficient and timely resolution of complaints and to support AFCA’s continued improvement of its fairness jurisdiction. |
Other changes
|
Proposal |
Reason |
|
|---|---|---|
| Proposal 9: Consistency of language about AFCA's monetary limits
|
To remove inconsistencies and provide clarity about the operation of our Rules to support the fair, efficient and timely resolution of complaints by removing uncertainty. |
Recommendation 2: Ensuring all AFCA decisions consider what is fair in all circumstances Recommendation 5: Improving transparency of timeliness and better managing timeliness expectations |
| Proposal 10: Clarifying the objection process for Rule A.8.3 | To provide clarity about the operation of our Rules to support the fair, efficient and timely resolution of complaints by removing uncertainty. | |
| Proposal 11: AFCA Banking and Finance Panels (Operational Guidelines change) | To provide clarity about the operation of our Rules to support the fair, efficient and timely resolution of complaints by removing uncertainty. | |
| Proposal 12: Definition changes | Minor changes to definitions and language to update certain areas of the Rules arising from legislative change, to give greater clarity and transparency of the scheme’s operation overall. | N/A |
| Proposal 13: Annual reporting | Minor changes to clarify AFCA’s reporting and transparency obligations, to better align the Rules with Regulator requirements. | N/A |
The Review Report did not recommend that AFCA increase its jurisdiction or monetary limits. The Recommendations were directed at improvements within AFCA's current jurisdiction. The proposed changes did not increase our jurisdiction or change the scope of the dispute resolution scheme. AFCA sought rather to better clarify how it operates and manages complaints within the scheme.
