The Federal Government has announced the creation of a transition team to lead the establishment of the Australian Financial Complaints Authority (AFCA).
Announced as part of the budget, the AFCA will combine and replace the Financial Ombudsman Service, the Credits and Investments Ombudsman and the Superannuation Complaints Tribunal in an attempt to reduce confusion for consumers. The transition team is tasked with ensuring that the new authority is operational by July 01, 2018.
Dr Malcolm Edey, former assistant governor (financial system) of the Reserve Bank of Australia has been appointed as chairman of the transition team. Dr Edey has been a member of the RBA’s senior policy committees and was deputy chairman of the Payments System Board.
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“Once legislation to establish the AFCA has passed the Parliament, the focus of the transition team will shift to overseeing the operational transition from the existing schemes to AFCA,” the Government said in a statement. “The transition team will consult extensively with industry and consumer stakeholders, as well as the Financial Ombudsman Service, Credit and Investments Ombudsman and Superannuation Complaints Tribunal.”
The transition team will advise the Government on the AFCA’s terms of reference, governance and funding arrangements and will make recommendations on the authorisation process for AFCA, as well as on the transitional arrangements needed to settle cases currently in front of the three existing schemes.
At the time of the announcement of the creation of the AFCA, which will settle broker disputes due to the inclusion of FOS,
Dallas Booth, CEO of
NIBA, said the changes may be unnecessary.
“Firstly we are not sure why there is a need for brokers to be involved in a change of this nature, we are not sure why there is the need to have wholesale change of EDR in the first place,” Booth told Insurance Business. “There have been some instances of confusion… but I’m sure those matters could have been easily resolved without wholesale change.”
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