On 30 July 2020, the Australian Securities and Investments Commission (ASIC) released Regulatory Guide 271: Internal dispute resolution (Guide). The Guide will come into effect on 5 October 2021.
The purpose of the Guide is to assist financial firms in dealing with complaints by having an appropriate internal dispute resolution (DR) system in place.
This article sets out who the Guide applies to, how to ensure compliance, and recommended next steps.
Who does it apply to?
ASIC’s new regulatory guide will apply to financial firms. “Financial firms” is defined broadly, to include (amongst others):
- Australian financial services licensees (AFSLs),
- Trustees of regulated superannuation funds (other than self-managed superannuation funds),
- Australian credit licensees,
- Trustees of approved deposit funds, and
- Retirement savings account providers.
An appropriate internal DR system must meet ASIC’s requirements and standards, that is, consumers and small businesses must have access to “fair, timely and effective dispute resolution”. The Guide explains what financial firms must do to have an appropriate internal DR system in place, and certain parts of the standards, as outlined in the guide, are enforceable by ASIC.
ASIC expects financial firms to take a proactive approach in identifying complaints. Complaints should not have to be in writing and the words “complaint” or “dispute” should not be explicitly required in order to trigger a firm’s internal DR process.
The following table sets out the main provisions of the new Guide: