Internal dispute resolution reporting reminder – are you obliged to report from 1 January 2024?

By Selina Nutley and Matthew Hinde

Background

New laws have made big changes to how financial firms handle complaints from consumers and small businesses. Now, they must meet higher standards in their internal dispute resolution (IDR) procedures. One important change is financial firms considered ‘in-scope’ must regularly report IDR data. The reporting obligations have been staggered, with an estimated 8,600 financial firms being required to report for the first time from 1 January 2024.

Who is covered?

All Australian financial services (AFS) licensees who provide financial services to retail clients and all Australian credit licensees are ‘in-scope’ and must lodge an IDR compliant report to the Australian Securities and Investments Commission (ASIC) every six months, regardless of whether any complaints were received.

‘In-scope’ financial firms have been divided into three tranches. The first two tranches include larger financial firms, banks and some superannuation funds. The third tranche includes all other AFS licensees providing financial services to retail clients and/or Australian credit licensees.

When is my reporting deadline?

First and second tranche financial firms have already commenced reporting. Third tranche firms must lodge a report with their IDR data for the period 1 July to 31 December 2023 during the submission window between 1 January to 29 February 2024. AFS licensees who have not received any complaints must still submit a report.

Publication of IDR data

ASIC said it intends to publish IDR data once all AFS licensees have commenced reporting. The precise data that will be published, including whether individual AFS licensees will be named, is yet to be detailed.

We can help

ASIC has specific requirements for both the content and format for each report. Penalties can be imposed for non-compliance. Contact the HW Funds team if you need assistance with lodging your IDR reports.