Revised Explanatory Memorandum(Circulated by authority of the Minister for Revenue and Financial Services, Minister for Women and the Minister Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)
Chapter 3 Review of the operation of the AFCA scheme
3.1 This Bill amends the Corporations Act and other Commonwealth legislation to introduce a new EDR framework, and enhanced IDR framework, for the financial system.
3.2 The new EDR framework, known as AFCA, will ensure that consumers have easy access to a single EDR scheme to resolve disputes about products and services provided by financial firms. The AFCA scheme will replace the SCT and existing EDR schemes approved by ASIC.
3.3 The enhanced IDR framework will require financial firms to report their IDR activities in accordance with ASIC requirements and allow ASIC to publish information it receives under new reporting requirements. This will allow ASIC to improve transparency about the performance of financial firms in relation to their IDR activities.
3.4 This Bill provides for the review of the AFCA scheme, including the IDR framework, 18 months after the AFCA scheme begins receiving complaints to ensure the scheme operates as effectively as possible.
Independent review of the amendments made by this Bill
3.5 To ensure the AFCA scheme operates as effectively as possible, the Minister must cause an independent review of the operation of the AFCA scheme as soon as practicable after 18 months from the day when the amendments made by Part 4 of Schedule 1 to this Bill apply. [Subclause 4(1)]
3.6 Part 4 of Schedule 1 to this Bill makes amendments which apply from a day specified by the Minister by notifiable instrument. The date specified by the Minister will be the date when no new complaints can be made to the SCT. This is also expected to be the same day AFCA begins receiving complaints.
3.7 The independent review must take into account feedback provided by complainants made under the AFCA scheme relating to whether their complaints were resolved in a way that was fair, efficient, timely and independent. One of the operational requirements of the AFCA scheme is that complaints against members of the scheme are resolved in a way that is fair, efficient, timely and independent. [Subclause 4(2)]
3.8 An independent review of the AFCA scheme will provide an opportunity for stakeholders to comment on the operation of the scheme in its first 18 months of operation, and consider opportunities to further enhance the effectiveness of the scheme to ensure it operates as effectively as possible.
3.9 The independent review must also specifically examine the appropriateness of monetary limits on the value of claims that may be made, and the value of remedies that may be determined, under the AFCA scheme in relation to disputes about credit facilities provided to primary production businesses, such as agriculture, forestry or fisheries. [Subclause 4(3)]
3.10 Once the independent review has been completed, the Minister must cause a written report about the review to be prepared. The Minister must also cause a copy of that report to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the written report is given to the Minister. [Subclauses 4(4) and 4(5)]
3.11 For the avoidance of doubt, the written report is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003. [Subclause 4(6)]