Federal Register of Legislation - Australian Government

Primary content

Other as made
This instrument sets out new standards and requirements that the Australian Securities and Investments Commission has made and approved for the internal dispute resolution procedures (IDR procedures) of financial firms, specifies requirements for written reasons for decisions about complaints in relation to regulated superannuation funds, approved deposit funds and retirement savings accounts, clarifies that financial firms must comply with their IDR procedures, and modifies the definition of “small business” in relation to IDR in Chapter 7 of the Corporations Act 2001 so it aligns with the definition of “small business” in the Rules of the Australian Financial Complaints Authority in relation to external dispute resolution.
Administered by: Treasury
Registered 30 Jul 2020
Tabling HistoryDate
Tabled HR24-Aug-2020
Tabled Senate24-Aug-2020
This Legislative Instrument has been subject to a Motion to Disallow:
Motion Date:
30-Nov-2020
Expiry Date:
22-Feb-2021
House:
Senate
Details:
Full
Resolution:
Withdrawn
Resolution Date:
22-Feb-2021
Resolution Time:
15:35
Provisions:

 

Australian Securities and Investments Commission

 

Explanatory Statement

 

 

ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98

 

This is the Explanatory Statement for ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98 (the principal instrument).

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Glossary

The following definitions of primary and delegated legislation are used:  

ASIC Act means the Australian Securities and Investments Commission Act 2001.   

Corporations Act means the Corporations Act 2001.

Corporations Regulations means the Corporations Regulations 2001.   

Credit Act means the National Consumer Credit Protection Act 2009.

Credit Regulations means the National Consumer Credit Protection Regulations 2010.

Legislation Act means the Legislation Act 2003.

RSA Act means the Retirement Savings Account Act 1997.

SIS Act means Superannuation Industry (Supervision) Act 1993.

Summary

1.       The financial sector legislation imposes obligations on financial firms to have internal dispute resolution (IDR) procedures to deal with complaints by consumers. Financial firms include financial services licensees, credit licensees and superannuation trustees.

2.       The principal instrument, which applies in relation to complaints received on or after 5 October 2021 by a financial firm:

(a)   sets out new standards and requirements that ASIC has made and approved for the IDR procedures of financial firms;

(b)   specifies requirements for written reasons for decisions about complaints in relation to regulated superannuation funds, approved deposit funds and retirement savings accounts;

(c)   clarifies that financial firms must comply with their IDR procedures; and

(d)  modifies the definition of “small business” in relation to IDR in Chapter 7 of the Corporations Act so it aligns with the definition of “small business” in the Rules of the Australian Financial Complaints Authority (AFCA) in relation to external dispute resolution.

Purpose of the instrument

3.       IDR is the first step in the financial services dispute resolution framework.  Financial firms have an opportunity to consider and attempt to resolve consumer complaints under IDR procedures before they can be escalated by the consumer for external consideration by AFCA.

4.       ASIC estimates that millions of Australian consumers make IDR complaints to financial firms each year. Financial firms that deal with retail clients are required to have IDR procedures that comply with standards and requirements made or approved by ASIC.

5.       Regulatory Guide 165 Licensing: Internal and external dispute resolution published on 30 July 2020 currently sets out ASIC’s policy settings relating to IDR procedures. ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution—Transitional) Instrument 2019/965 (the transitional principal instrument) sets out the existing standards and requirements that ASIC has made and approved for the IDR procedures and applies to complaints received before 5 October 2021 by a financial firm.

6.       ASIC considers that the consumer protection objectives underlying IDR procedures are only fully met where a financial firm:

(a)     has IDR procedures that comply with standards and requirements made or approved by ASIC; and

(b)     complies with those procedures when handling a consumer complaint.

7.       ASIC has decided that the policy settings, and the standards and requirements, should be made more explicit so that financial firms clearly understand their legal obligations in relation to IDR procedures.

Consultation

8.       In Consultation Paper 311 Internal Dispute Resolution: Update to RG 165 (CP 311), ASIC consulted on proposals to update existing IDR requirements. A draft updated Regulatory Guide was attached to CP 311.

9.       ASIC consulted from 15 May 2019 until 9 August 2019.  ASIC received 68 submissions from a range of industry associations, financial firms, consumer organisations and individuals.  After consultation, 4 roundtables were held, one with the Australian Banking Association, two broader industry and  consumer roundtables, and one focussed on superannuation. A meeting was also held with banking and insurance customer advocates to discuss the proposals relevant to their roles.  Following the roundtables, ASIC received 9 additional written submissions.

10.     The key issues raised by respondents related to:

(a)           IDR data collection and reporting;

(b)          the definition of “complaint” including complaints made on social media;

(c)           IDR timeframes and the content of IDR responses;

(d)          the role of customer advocates;

(e)           identifying and managing systemic issues;

(f)           how ASIC will enforce the updated Regulatory Guide; and

(g)          transitional arrangements for implementing the new IDR requirements.

11.     Given the number of issues raised in submissions about the requirements for mandatory IDR data collection and reporting, ASIC has postponed providing updated guidance on the data-specific matters until after further targeted consultation commences later in 2020.

12.     ASIC Report 665Response to submissions on CP 311 Internal dispute resolution: Update to RG 165 sets out further information about the key issues that arose out of consultation and details ASIC’s response to those issues.

13.     In CP 311, ASIC proposed to clarify the enforceability of the proposed new standards and requirements through a legislative instrument.  CP 311.22 stated that once the new policy settings were finalised, ASIC would create a legislative instrument that would have the effect of making enforceable “core requirements” of the proposed new policy.

14.     A number of respondents queried which of the proposed new policy requirements would be considered “core requirements”.  Consumer representatives generally argued that all of the proposed new policy should be enforceable.  Some industry respondents also asked for more clarity on the thresholds for a breach of the “core” requirements to become enforceable.    

15.     In CP 311, ASIC also set out the proposal to align the definition of “small business” in Chapter 7 of the Corporations Act for the purposes of IDR with the broader AFCA definition. Whilst there were some concerns raised, the proposal was broadly supported by industry and consumer groups as it ensures consistent access to IDR and EDR across the financial services sector.

16.     CP 311 also stated that ASIC intended to modify s912A(1)(g)(i) of the Corporations Act to expressly require financial services licensees to have and comply with IDR standards made or approved by ASIC.

Operation of the instrument

Standards and requirements for IDR

17.     The financial sector legislation imposes IDR requirements on the following kinds of regulated entities:

(a)     financial services licensees and unlicensed secondary sellers and unlicensed product issuers;

(b)     credit licensees and unlicensed carried over instrument lenders; and

(c)     trustees of regulated superannuation funds and of approved deposit funds, and retirement savings account (RSA) providers.

18.     Subparagraphs 912A(2)(a)(i) and 1017G(2)(a)(i) of the Corporations Act require financial services licensees, and persons to whom section 1017G of that Act applies (generally, unlicensed secondary sellers and product issuers) to have an IDR procedure that complies with the standards and requirements made or approved by ASIC and covers complaints made by retail clients in relation to the financial services provided.

19.     Paragraph 47(1)(h) of the Credit Act requires credit licensees to have an IDR procedure that complies with the standards and requirements made or approved by ASIC and covers disputes in relation to the credit activities engaged in by the licensee or its representatives. A similar obligation is imposed on unlicensed carried over instrument lenders under notional paragraph 47(1)(e) of that Act.

20.     Trustees of regulated superannuation funds (other than self-managed superannuation funds), trustees of approved deposit funds and retirement savings account (RSA) providers are subject to the same IDR obligations as financial services licensees: see paragraph 101(1)(b) of the SIS Act and paragraph 47(1)(b) of the RSA Act.

21.     Contraventions of the IDR obligations may give rise to civil penalty consequences or might constitute an offence, for example:

(a)     a financial services licensee that contravenes paragraph 912A(1)(g) of the Corporations Act will have contravened a civil penalty provision (see subsection 912A(5A) of that Act);

(b)     a credit licensee that contravenes paragraph 47(1)(h) of the Credit Act will have contravened a civil penalty provision (see subsection 47(4) of that Act);

(c)     an unlicensed secondary seller or product issuer that contravenes subsection 1017G(1) of the Corporations Act will have committed an offence based on subsection 1311(1) of that Act;

(d)     a trustee of a regulated superannuation fund that intentionally or recklessly contravenes subsection 101(1) of the SIS Act will have committed an offence (see subsection 101(2) of that Act);

(e)     an RSA provider that intentionally or recklessly contravenes subsection 47(1) of the RSA Act will have committed an offence (see subsection 47(3) of that Act).

22.     Section 5 of the principal instrument sets out the standards and requirements made and approved by ASIC. The contents of the standards and requirements are set out in specific paragraphs of ASIC Regulatory Guide 271 Internal Dispute Resolution (Regulatory Guide 271) published on 30 July 2020.

23.     The standards and requirements are also highlighted in Regulatory Guide 271 (with the use of text borders and headers around relevant paragraphs) to clearly identify the standards and requirements that are enforceable.

24.     In summary, the highlighted paragraphs:

(a)     require financial firms to deal with issues raised by consumers that meet a specific definition of “complaint” under their IDR procedures. Those procedures must comply with ASIC’s standards and requirements;

(b)     set requirements in relation to:

(i)      objections to superannuation death benefit distribution decisions; and

(ii)     reviews of unresolved IDR complaints by firms’ customer advocates;

(c)     place obligations on financial firms when outsourcing part or all of their IDR procedures;

(d)     set out:

(i)      what financial firms must include in an IDR response;

(ii)     the maximum timeframes that financial firms have to provide an IDR response;

(iii)    the circumstances in which a financial firm does not need to provide an IDR response within the maximum IDR timeframe;

(e)     require financial firms to:

(i)      inform consumers about their right to pursue their complaint with AFCA;

(ii)     have processes for identifying, escalating, analysing and reporting on systemic issues arising from complaints;

(f)      set standards for the design, implementation and ongoing improvement of firms’ IDR procedures including:

(i)      making the IDR procedures free of charge to consumers and easy to use and understand;

(ii)     resourcing the IDR procedures so that it operates fairly, effectively, and efficiently;

(iii)    ensuring that authorities for determining and/or approving complaint outcomes and financial delegations in place for paying amounts to complainants facilitate the fair and efficient resolution of complaints;

(iv)    having an effective system for recording and tracking complaints;

(v)     implementing complaint resolution outcomes in a timely manner; and

(vi)    reporting complaints data regularly to senior management and boards.

25.     The contents of those paragraphs of Regulatory Guide 271 are incorporated by reference into the principal instrument. The incorporation by reference complies with subsection 14(1) of the Legislation Act as it incorporates matter in the Guide as existing at the time the principal instrument commences. Regulatory Guide 271 is available on the ASIC website at www.asic.gov.au.

26.     These standards and requirements apply in relation to complaints received on or after 5 October 2021 by a financial firm.

27.     In making and approving standards and requirements for IDR, ASIC must take into account Australian / New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organizations published jointly by, or on behalf of, Standards Australia and Standards New Zealand, as in force or existing on 29 October 2014 (the 2014 Standard) and any other matter ASIC considers relevant: see subregulations 7.6.02(1) and 7.9.77(1) of the Corporations Regulations; subregulations 10(1) and 48(1) of the Credit Regulations.

28.     ASIC took into account the 2014 Standard in the following way:

(a)     by adopting the definition of “complaint” from the 2014 Standard in Regulatory Guide 271;

(b)     by providing detailed guidance in specific paragraphs of Regulatory Guide 271 about the definition of “complaint” from the 2014 Standard; and

(c)     by developing “IDR Standards” in specific paragraphs of Regulatory Guide 271, that reflect the requirements for effective complaint management set out in the 2014 Standard. These relate to:

(i)      top-level commitment to effective, fair and timely complaint management;

(ii)     enabling complaints;

(iii)    resourcing;

(iv)    responsiveness;

(v)     objectivity and fairness;

(vi)    complaint management policies and procedures;

(vii)   data collection, analysis and internal reporting; and

(viii)  continuous improvement of the IDR process.

29.     The other matters that ASIC took into account were:

(a)     insights, observations and findings from a series of IDR onsite visits held at financial firms in 2019 as part of ASIC’s enhanced supervisory approach. ASIC found examples of:

(i)      high volumes of complaints being handled at financial firms’ frontlines without adequate quality assurance, monitoring and oversight;

(ii)     issues with the quality of IDR responses;

(iii)    specialist complaints staff who were limited by their financial delegations and the influence of business units that caused the complaint;

(iv)    limited systemic focus;

(v)     ineffective complaint IT systems and significant under-recording of complaints; and

(vi)    limited monitoring of, or controls to ensure, compliance with regulatory IDR requirements, including maximum IDR timeframes;

(b)     the findings of ASIC’s consumer research, set out in ASIC Report 603: The consumer journey through the Internal Dispute Resolution process of financial service providers (10 December 2018), about the importance of timeliness in ensuring good consumer outcomes at IDR;

(c)     submissions made in response to CP 311; and

(d)     ASIC’s own regulatory experience in administering IDR regulatory guidance since 2001.

Requirements relating to written reasons

30.     Paragraph 101(1)(d) of the SIS Act imposes an obligation on a trustee of a regulated superannuation fund or of an approved deposit fund to ensure that written reasons are given for any decision of the trustee (or failure by the trustee to make a decision) relating to a complaint. Paragraph 47(1)(d) of the RSA Act imposes an equivalent obligation on RSA providers. A trustee or an RSA provider who intentionally or recklessly contravenes these obligations commits an offence.

31.     Those statutory obligations must be in accordance with requirements determined by ASIC in a legislative instrument: see subsection 101(1B) of the SIS Act and subsection 47(2A) of the RSA Act. ASIC may specify for the purposes of those requirements any or all of the following:

(a)     the persons who must be given written reasons;

(b)     the matters that must be included in those reasons;

(c)     the times by which those reasons must be given;

(d)     the circumstances that constitute a failure to make a decision.

32.     Section 6 of the principal instrument specifies ASIC’s requirements in relation to the written reasons. ASIC’s requirements are set out in specific paragraphs of Regulatory Guide 271 published on 30 July 2020.

33.     These paragraphs set out what all financial firms, including trustees of regulated superannuation funds or of approved deposit funds and RSA providers, must include in an IDR response.  Trustees and RSA providers satisfy their statutory obligation to provide written reasons for a decision on a complaint when they provide an IDR response that meets the requirements set out in specific paragraphs of Regulatory Guide 271. Some additional requirements apply to complaints relating to superannuation death benefit distributions.  These requirements primarily reflect how the legislative requirements for complaints to AFCA about the payment of superannuation death benefits set out in section 1056 of the Corporations Act interact with IDR requirements.

34.     In summary, the paragraphs specify that:

(a)     the IDR response is a written communication advising the complainant of the final outcome of their complaint and providing contact details for AFCA should the complainant wish to escalate the matter to external dispute resolution; and

(b)     where a financial firm rejects or partially rejects a complaint, the IDR response must clearly set out the reasons for decision by:

(i)      identifying and addressing the issues raised;

(ii)     setting out findings on material questions of fact and referring to information that supports those findings; and

(iii)    providing sufficient detail to enable the complainant to understand the basis of the decision when deciding whether to escalate the matter to AFCA.  Where a complaint relates to a superannuation death benefit distribution, information must also be provided about the 28-day time limit for escalating the complaint to AFCA.

35.     These paragraphs also set out requirements for all financial firms, including trustees of regulated superannuation funds or of approved deposit funds and RSA providers, relating to IDR delay notifications.  Trustees and RSA providers satisfy their statutory obligation to provide written reasons for failure to make a decision on a complaint when they provide an IDR delay notification that meets the requirements set out in specific paragraphs of Regulatory Guide 271.  Some specific requirements are set out for the content of IDR delay notifications relating to complaints about superannuation death benefit distributions.

36.     In summary, these paragraphs provide that where the following circumstances exist, a financial firm does not need to provide an IDR response within the maximum IDR timeframe:

(a)     there must be no reasonable opportunity for the financial firm to provide the IDR response within the timeframe because:

(i)      resolution of the individual complaint is particularly complex; or

(ii)     circumstances beyond the financial firm’s control are causing complaint management delays; and

(b)     before the expiry of the IDR timeframe, the firm provides an IDR delay notification that informs the complainant of the reasons for the delay and provides details for accessing AFCA. Some specific requirements are set out for the content of IDR delay notifications relating to complaints about superannuation death benefit distributions.

37.     The contents of those paragraphs of Regulatory Guide 271 are incorporated by reference into the principal instrument. The incorporation by reference complies with subsection 14(1) of the Legislation Act as it incorporates matter in the Guide as existing at the time the principal instrument commences. Regulatory Guide 271 is available on the ASIC website at www.asic.gov.au.

38.     Section 6 of the principal instrument commences on the later of 5 October 2021 and the day it is registered. The deferred commencement until 5 October 2021 operates to preserve the underlying effect of regulations 7.9.48, 7.9.48A, 7.9.48C and 7.9.48D of the Corporations Regulations until that date: see regulation 10.27.03. These regulations impose requirements in relation to written reasons for certain internal review decisions in relation to regulated superannuation funds, approved deposit funds and retirement savings accounts.

39.     The requirements for the written reasons apply in relation to complaints received on or after 5 October 2021 by trustees and RSA providers.

Clarification of the obligation to comply with IDR procedures

40.     The financial sector legislation imposes an obligation on financial firms to have an IDR procedure that complies with the standards and requirements made or approved by ASIC and which covers complaints made by retail clients in relation to the financial services provided or the credit activities engaged in by the firm or its representatives.

41.     Section 7 of the principal instrument is intended to clarify the law, and to remove any doubt, that financial firms must not only have IDR procedures that meet ASIC’s standards and requirements, they must also comply with those procedures.

42.     The clarification is achieved by the exercise of declaration powers under the Corporations Act and Credit Act that have the effect of modifying the relevant statutory provisions to impose new clarificatory obligations. ASIC’s declaration powers to modify statutory provisions enable ASIC to create new obligations: see ASIC v DB Management Pty Limited (2000) 199 CLR 321 at [45].

43.     The legislative provisions that have been modified are those that impose the primary IDR obligations, namely paragraph 912A(1)(g) and subsection 1017G(1) of the Corporations Act, and subsection 47(1) of the Credit Act. As contraventions of the primary IDR obligations may give rise to civil penalty consequences or constitute an offence under the existing legislation, the same civil penalty consequences or offences will flow through to the new modified clarificatory obligations.

44.     The new modified clarificatory obligations apply to financial services licensees, unlicensed secondary sellers and unlicensed product issuers, credit licensees and unlicensed carried over instrument lenders. As ASIC does not have a declaration power to modify section 101 of the SIS Act or section 47 of the RSA Act, there are no equivalent new modified clarificatory obligations that apply to trustees of regulated superannuation funds and of approved deposit funds or RSA providers.

Small business” definition for internal dispute resolution

45.     Subsection 761G(12) of the Corporations Act contains a definition of “small business” for the purposes of Chapter 7 of that Act. The definition affects whether a financial product or financial service is issued or provided to a person as a retail client: see subparagraph 761G(5)(a)(ii) and paragraph 761G(7)(b). Generally, a financial product or financial service that is issued or provided to a person for use in connection with a small business is issued or provided to the person as a retail client.

46.     The definition of “small business” in subsection 761G(12) of the Corporations Act does not align with the definition used and applied in the AFCA Rules in relation to external dispute resolution. Generally, the definition of “small business” in the AFCA Rules is broader than the definition of “small business in subsection 761G(12).

47.     ASIC considers there are benefits in aligning the two definitions, including:

(a)     ensuring that all small businesses that are able to access AFCA for external dispute resolution also have a clear entitlement to access financial firms’ IDR processes; and

(b)     providing consistency across the financial dispute resolution framework.

48.     This alignment is also broadly consistent with Recommendation 1.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which recommended that the Australian Banking Association should amend the definition of “small business’ in the Banking Code of Practice so that the Code applies to any business or group employing fewer than 100 full-time equivalent employees, where the loan applied for is less than $5 million.

49.     To achieve the alignment with the AFCA Rules, ASIC has exercised its declaration powers under Part 7.6 (in relation to financial services licensees) and Part 7.9 (in relation to unlicensed secondary sellers and product issuers) of the Corporations Act to modify the definition of “small business” (and therefore the application of the law in relation to retail clients) in relation to an obligation in Parts 7.6 and 7.9 of that Act to have an internal dispute resolution procedure.

50.     The effect of the modification is to effectively broaden the meaning of “retail client” for the purposes of the provisions in Chapter 7 dealing with internal dispute resolution. The modification does not affect the meaning of “retail client” in relation to any other aspect of Chapter 7.

51.     The modified definition of “small business” applies in relation to complaints received on or after 5 October 2021 by financial services licensees and unlicensed secondary sellers and unlicensed product issuers.

Legislative instrument and primary legislation

52.     The subject matter and policy implemented by this instrument is more appropriate for a legislative instrument rather than primary legislation because:

(a)     the standards and requirements for internal dispute resolution, including requirements in relation to written reasons in relation to decisions of superannuation trustees and RSA providers, requires ASIC to take into account the current Australian and New Zealand Standard so as to ensure that the IDR standards of the Australian financial services industry meet current community expectations about complaint management transparency, timeliness, quality and fairness;

(b)     the declarations that modify provisions of the legislation to clarify that  financial firms must not only have IDR procedures but also to comply with those procedures are specific amendments designed to ensure the application of primary legislation responds to poor industry compliance practices in a way that is consistent with the policy of the primary legislation to promote consumer protection;

(c)     the declaration that modifies the meaning of “small business” for  the purposes of IDR procedures is a specific amendment designed to ensure the application of primary legislation remains flexible to respond to market developments, particularly so as to achieve alignment with the jurisdiction of the AFCA scheme in relation to external dispute resolution.

Legislative authority

53.     The sources of power to make the principal instrument are:

(a)     in relation to Part 2 of the instrument (standards and requirements for internal dispute resolution, including requirements in relation to written reasons in relation to decisions of superannuation trustees and RSA providers):

(i)      subsection 11(4) of the ASIC Act for the purposes of subparagraphs 912A(2)(a)(i) and 1017G(2)(a)(i) of the Corporations Act; and

(ii)     subsection 12A(6) of the ASIC Act for the purposes of:

(A)    paragraph 47(1)(b) of the RSA Act;

(B)    paragraph 101(1)(b) of the SIS Act;

(C)    subparagraph 47(1)(h)(i) of the Credit Act;

(D)    subparagraph 47(1)(e)(i) of the Credit Act as notionally inserted by regulation 25E and Schedule 2 to the Credit Regulations;

(iii)    subsection 47(2A) of the RSA Act and subsection 101(1B) of the SIS Act; and

(b)     in relation to Part 3 of this instrument (obligation to comply with internal dispute resolution procedures, and modification to definition of “small business”)—subsections 926A(2) and 1020F(1) of the Corporations Act and subsection 109(3) of the Credit Act.

54.     The principal instrument is a disallowable legislative instrument.


Statement of Compatibility with Human Rights

55.     The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.


Attachment

Statement of Compatibility with Human Rights

 

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

ASIC Corporations, Credit and Superannuation (Internal Dispute Resolution) Instrument 2020/98.

Overview

1.       The financial sector legislation imposes obligations on financial firms to have internal dispute resolution procedures to deal with complaints by consumers.

2.       The instrument implements ASIC’s new policy in relation to internal dispute resolution for:

(a)     financial services licensees and unlicensed secondary sellers and unlicensed product issuers for the purposes of the Corporations Act 2001;

(b)     trustees of regulated superannuation funds and of approved deposit funds for the purposes of the Superannuation (Industry) Supervision Act 1993;

(c)     retirement savings account (RSA) providers for the purposes of the Retirement Savings Accounts Act 1997; and

(d)     credit licensees and unlicensed carried over instrument lenders for the purposes of the National Consumer Credit Protection Act 2009.

3.       The instrument:

(a)     sets out the standards and requirements that ASIC has made and approved in relation to the internal dispute resolution procedures of financial firms;

(b)     specifies requirements for written reasons for decisions about complaints in relation to regulated superannuation funds, approved deposit funds and retirement savings accounts;

(c)     clarifies that financial firms are obliged to comply with their internal dispute resolution procedures; and

(d)     modifies the definition of “small business” in relation to internal dispute resolution in Chapter 7 of the Corporations Act 2001 so it aligns with the definition with the definition of “small business” in the AFCA rules dealing with external dispute resolution.

4.       The instrument applies in relation to complaints received on or after 5 October 2021 by financial firms.

Assessment of human rights implications

5.       The instrument does not engage any of the applicable rights or freedoms.

Conclusion

6.       The instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.