Among the many initiatives announced when clearing of the decks ahead of the calling of the Federal election on Sunday, the Assistant Treasurer announced on 5 May 2016 the appointment of a panel to review the financial services industry's external dispute resolution (EDR) and complaints framework: see here.
This is part of a series of measures announced by the Government to counter the Opposition's promise of holding a Royal Commission into the financial services industry. Other measures include:
- the extension of Greg Medcraft's term as ASIC Chairperson by 18 months to November 2017 (see also here)
- increasing ASIC funding and creation of a user pays scheme for future ASIC funding
- the appointment of an extra ASIC commissioner with experience in the prosecution of crimes in the financial services industry, and
- accelerated implementation of the Financial System Inquiry (FSI) consumer protection recommendations: see here.
The independent expert complaints framework panel consists of:
- Professor Ian Ramsay (Chair)
- Mr Alan Kirkland
- Ms Julie Abramson
The panel is tasked with reviewing the role of the industry's three EDR bodies:
- Financial Ombudsman Scheme (FOS)
- Superannuation Complaints Tribunal (SCT), and
- Credit and Investments Ombudsman (CIO).
The review will consider the powers, governance and accountability of the current framework and will assess whether the schemes could be better integrated. This will include considering whether a one-stop-shop for handling consumer complaints should be established. A key question if this is to occur will be whether it will be a statutory scheme like the SCT or an industry based scheme like FOS and CIO. Given recent negative controversy regarding FOS, a statutory scheme may be seen to be preferable.1
ASIC will also undertake a review of FOS's small business jurisdiction, which will also be considered by the panel.
A final report is expected by the end of 2016.
The Government has also announced the reconstitution of the Financial Sector Advisory Council: Michael Cameron, CEO Suncorp (Chair); Sarah Rennie, MD Equity Capital Markets, Goldman Sachs; Brian Hartzer, CEO Westpac; Craig Meller, CEO AMP; Heather Zampatti, Head of Wealth Management, Bell Potter Securities; Brett McKeon, MD Australian Finance Group; Mike Hirst, CEO Bendigo and Adelaide Bank; Lisa Gray, CEO Victorian Funds Management; Karl Morris, Executive Chairman, Ord Minnett: see here.
The FSAC's charter will give the Council a mandate to advise on:
- the implementation of its response to the FSI and provide advice to the Government
- the performance of ASIC, APRA and the Payments System Board of the Reserve Bank
- the conditions and emerging trends in the financial sector
- potential areas for regulatory reform to improve the efficiency and competitiveness of the financial sector.