The Australian Financial Complaints Authority (AFCA) acknowledges yesterday’s announcement from the Australian Government about the Compensation Scheme of Last Resort (CSLR), including the completion of its board with an independent Chair.

AFCA welcomes the appointment of Jo-Anne Bloch as independent Chair. Ms Bloch replaced Transitional CSLR Board member Justin Untersteiner from 1 February 2024.  AFCA looks forward to working with the CSLR Board ahead of the scheme’s commencement on 2 April 2024.

The announcement also clarified the Government’s stated intention that the CSLR will provide compensation where the misconduct is by a financial services firm that was licensed to provide the relevant product or service, and its commitment to changing the CSLR legislation to reflect this.  

Until this amendment is in place, the Government has temporarily changed the conditions of AFCA’s authorisation as the financial sector dispute resolution scheme to align with the intended scope of the CSLR.   These changes will remain in place until the amendments to the CSLR legislation are made.

They clarify that AFCA will only progress complaints potentially eligible for the CSLR if the financial services firm involved was licensed to provide the relevant product or service (‘licensed conduct’).  

AFCA is required to implement these conditions.   AFCA will also make relevant changes to its Rules, following ASIC directions and regulatory processes.

Published 27 February 2024