The latest IDR data reporting framework mandates that all financial firms must submit their internal dispute resolution (IDR) reports to the Australian Securities and Investments Commission (ASIC) for the first time by 29 February 2024.
With the deadline now passed, the corporate regulator is anticipated to imminently release the IDR data.
Earlier indications from ASIC revealed that an analysis of the data would shape its final approach to publication. The regulatory body is expected to communicate its conclusive approach in advance of the actual publication.
The enforcement of the obligation occurred in three phases to allow smaller firms to adequately prepare, with the last phase taking effect from 1 January 2024, and covering the six-month period from 1 July to 31 December 2023.
Financial firms must report to ASIC even if there have been no complaints during a reporting period. Failing to submit a report even if it’s a “nil submission”, indicating no complaints, puts a firm at risk of breaching IDR reporting regulations and may lead to severe penalties.
“The framework is a culmination of detailed consultation with industry to improve and standardise the quality of IDR data. Collection of IDR data will improve ASIC’s capabilities as a data-driven regulator. This data will give greater visibility of where consumers experience problems or where harms may be occurring within firms,” said ASIC deputy chair Karen Chester in May last year.
“It will be an invaluable resource for ASIC, industry, consumer groups, and ultimately consumers themselves.”
An initial group of 97 large financial firms, including banks and some superannuation funds, were required to begin reporting their IDR data to ASIC by 28 February 2023.
Subsequently, a second group of 262 financial firms were required to submit their IDR reports for the first time by 31 August 2023. ASIC previously noted that the first two groups include many of the largest financial firms and are estimated to account for more than 60 per cent of consumer and small business complaints made at IDR.
The remaining financial firms included AFS licensees with a retail authorisation and all Australian credit licensees.
Moving forward, the deadline to provide ASIC with IDR data through ASIC’s Regulatory Portal is within two months of the end of each six-month reporting period.
“The data to be reported includes any complaints required to be covered or covered by the financial firm’s IDR procedure made in, or open at any time, during the reporting period,” law firm Baker McKenzie said.
“Complaints made prior to the reporting period are not to be included. Importantly, the obligation to report IDR data falls to the financial firm. Where an entity has multiple subsidiaries that hold separate AFS and/or credit licences, each subsidiary licensee is required to submit a separate IDR data report to ASIC.
“If a financial firm holds both an AFS licence and a credit licence (with the same licence number), they must submit a consolidated report for both licences to ASIC for each reporting period.”
