ASIC has approved changes to the Australian Financial Complaints Authority Rules which give effect to the AFCA 'authorisation condition' introduced by the Government on 19 February.

Under the Government’s additional condition, AFCA is required to expand access to its scheme for consumers and small businesses that were harmed by financial misconduct, dating back to 1 January 2008. AFCA will be able to deal with certain complaints about conduct by current member financial firms which which AFCA, its predecessor schemes, courts, or tribunals have not previously dealt.

Consistent with the Government’s condition, AFCA’s new rules require that an eligible legacy complaint:

• ought to relate to a compulsory member of the AFCA scheme who is a member of the AFCA scheme at the time the complaint is made;
• ought not to be an excluded complaint; and
• ought to be made during the lodgment period,1 July 2019 to 30 June 2020.

ASIC approved these rules in accordance with legislative requirements in s1052D Corporations Act which require AFCA to seek ASIC's approval for material changes to the AFCA scheme.

AFCA has also released updated operational guidelines which explain the way in which AFCA will deal with old complaints, or 'legacy complaints' as ASIC likes to call them. The new jurisdiction, which covers complaints about conduct going back to 2008, may raise novel issues about how AFCA deals with complaints. If these issues require or necessitate material changes to the scheme, ASIC will then have to review these.

On 19 February this year, the responsible minister made a notifiable instrument: the AFCA Scheme (Additional Condition) Amendment Authorisation 2019, which required AFCA to accept old complaints dating back to 1 January 2008.

Between 18 March and 12 April, AFCA consulted the public about its desire to change some rules to give effect to the requirements in the legislative instrument.

ASIC is obliged to oversee AFCA (approving material changes, among other things) but it plays no part in the handling of individual complaints (under the AFCA scheme) and will not intervene in the decision-making processes of AFCA.