“To be prepared is half the victory”
— Miguel de Cervantes Saavedra
Your regulated documents
Financial Services Guides & Statements of Advice
COMMISSIONS:
Grandfathering arrangements for conflicted remuneration and other banned remuneration will cease from 1 January 2021.
You will need to remove references included in documents, and ensure grandfathered commissions are switched off.
MORTGAGE BROKERS :
Prepare documentation to evidence you are acting in the best interests of your clients and to prioritise clients’ interests when providing credit assistance.
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Public Policies
Complaints Policy:
You will need to create and a publish a public Complaints Policy that explains
- how consumers may lodge a complaint;
- options for additional help to lodge their complaint;
- key steps for dealing with complaints;
- response timeframes and details about accessing AFCA where a complaint it not resolved.
Commences 5 October 2021
Privacy Policy:
A review currently underway may see a change of definition regarding personal information and widening of the scope which will impact your Public Privacy Policy.
In addition, there may be changes to notice and collection.
Watch this space
Letters of Engagement & Standard form contracts
Unfair Contract Terms:
Changes to the Unfair Contract Terms legislation.
At a high level, civil penalties can be imposed for unfair contract terms; proof of unfairness will be easier to prove; remedies will be expanded.
Watch this space
Definition of Consumer:
From 1 July 2021 the definition of consumer in the Australian Securities and Investments Commission Act 2001 (Cth), which contains consumer protection provisions that mirror the ACL relating to financial products and services, will be changed.
The definition of ‘consumer’ is set to expand on 1 July 2021.
Currently a person is taken to have acquired goods or services as a ‘consumer’ if the amount they paid was $40,000 or less.
The monetary threshold is set to increase to $100,000.
You will need to review your standard contracts and terms and conditions to ensure they do not mislead or misrepresent consumers’ rights and remedies.
Your Compliance Manual
Anti-Hawking:
Prohibition on offering or selling or issuing financial products to retail client in the course of, or because of unsolicited contact.
Unsolicited contact is contact to which the consumer did not consent.
Commences 5 October 2021.
Reference Checking:
AFSLs and ACLs must undertake reference checking and information sharing regarding former, current or prospective representatives.
If you fail to undertake reference checking and information sharing regarding a prospective representative you will be subject to a civil penalty.
Commences 1 October 2021
Breach Reporting:
AFSLs and ACLs must lodge reports about reportable situations to ASIC which includes breaches and likely breaches that are significant if the investigation continues for more than 30 calendar days and the outcomes of those investigations.
AFSLs and ACLs must report serious compliance concerns about financial advisers engaged by another financial services licensee to ASIC and to the other licensee.
ASIC must publish data on breach reports lodged by licensees.
Commences 1 October 2021
Investigating and Reporting Misconduct:
AFSLs and ACLs must notify clients of misconduct, conduct investigations and remediate affected clients.
AFSLs and ACLs must maintain records to show compliance with the obligations to notify, investigate and remediate misconduct.
AFSLs and ACLs who fail to comply are subject to civil penalties.
Commences 1 October 2021
Complaints
Outsourced Providers:
If you outsource part of all of your IDR process you will need to have measures in place to ensure due skills and care is taken in choosing a suitable service provider;
you will need to monitor the ongoing performance of your service provider and deal with them should they breach service level agreements or fall short of their obligations.
Process:
You will need to change
- the definition of complaints;
- your process to acknowledge a complaint within 24 hours;
- IDR response times to no later than 30 calendar days.
Resources:
You will need to:
- identify IDR staff and have adequate numbers to deal with complaints;
- ensure IDR staff are resourced, capable and operate under the right position descriptions.
Metrics and monitoring:
You will need:
- extensive reporting capabilities;
- to carry about regular and ongoing quality assurance;
- to conduct regular compliance audits to identify and address issues of non-compliance and include complaints in annual reports.
Complaint amendments due 5 October 2021
Mortgage Brokers:
Develop a compliance framework to support
Mortgage brokers to act in the best interests of their clients and to prioritise their clients’ interests when providing credit assistance.
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Licensee Inactivity:
ASIC may suspend or cancel an AFS licence if the licensee does not provide a financial service within 6 months of the licence being granted, or if the licensee ceases to carry on a financial service business.
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