This week, the government released its consultation papers for industry feedback on the new EDR scheme for financial services, which was announced in the 2017 federal budget recently.
As part of the new EDR scheme, a dispute resolution body will be formed called the Australian Financial Complaints Authority (AFCA), which will replace FOS, the CIO and the Superannuation Complaints Tribunal (SCT). The AFCA will be operational from 1 July 2018 and all financial firms must be members of the new body.
ASIC powers will also be strengthened for “enhanced oversight and monitoring” of the scheme, while financial services firms will adhere to “enhanced transparency and accountability of internal dispute resolution activities”, the EDR consultation paper states.
The government is also seeking stakeholder feedback on the implications of removing the requirement for credit representatives to be members of the new one-stop shop.
The new EDR scheme introduces two new bills into Parliament - the Treasury Laws Amendment (External Dispute Resolution) Bill 2017 and Treasury Laws Amendment (External Dispute Resolution) Regulations 2017.
As well as asking for submissions on the AFCA, the government is also seeking additional feedback on a range of matters, including whether the compensation caps for certain financial products, such as mortgages and general insurance products, should move immediately to $1 million upon commencement of the new one stop shop.
The closing date for submissions on the consultation is 14 June 2017.