The Federal Government has been warned against rushing too quickly towards implementing new financial services external dispute resolution (EDR) arrangements under the new Australian Financial Complaints Authority (AFCA).
The Association of Superannuation Funds of Australia (ASFA) has bluntly told the Federal Treasury that the move to the AFCA arrangement risks being compromised because the timeframes were too short.
“ASFA considers that the timeframe for stakeholders to provide input on the consultation material is inadequate given the significant nature of the reforms,” the superannuation body has said in a submission to the Treasury.
It said this was “compounded by the fact that the current consultation package represents only a small part of the total EDR framework, with many important details still to be clarified”.
“We understand the need for an accelerated consultation process stems from the intention that the new Australian Financial Complaints Authority (AFCA) be operational by 1 July 2018. However, we note that it is simply not possible for stakeholders to fully assess the potential implications of the reforms without access to a draft of the terms of reference for AFCA, the constitution documents for the scheme operator, and the ASIC regulatory requirements,” the ASFA submission said.
It said that rather than moving to an EDR framework that represented the best elements of both the current tribunal and ombudsman frameworks, “there is the risk that the current process may mean we end up with an inferior EDR model that adversely impacts stakeholders”.
In ASFA’s view, a more measured and appropriate implementation timeframe would be for the new
EDR arrangements to commence the 30 June or 1 January arising no earlier than 12 months after the
finalisation of all relevant materials.