“Well, what’s the use in complaining
when you’ve got what you don’t need”
— New Order, “Run 2”, 2005
Are you ready to report your IDR data?
The Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Act 2018 (AFCA Act) reshaped the financial services dispute resolution framework. The AFCA Act provided ASIC with additional powers with the aim of improving transparency around internal dispute resolution (IDR). These reforms;
- require financial firms to report their IDR activities to ASIC in accordance with ASIC requirements
- give ASIC the power to determine the content and form of IDR reporting; and
- enable ASIC to publish the IDR data, including at the firm level.
Most Licensees will find their first reporting period to submit their IDR data to ASIC will be for complaints made in the period 1 July 2023 to 31 December 2023, with lodgement by 29 February 2024. ASIC confirmed the updated implementation timeframe on May 5th. ASIC has granted a one month extension for Licensees lodging their first IDR report, after this time Licensees will be required to report on their IDR data one month after the reporting period ends every 6 months.
If you fail to submit your IDR data before the deadline, you will be in breach of the IDR reporting requirements which may have serious consequences, including civil penalties.
Who must report IDR data to ASIC?
ASIC requires the following to submit reports:
- All Australian Financial Service Licensees with authorisation to provide advice to retail clients;
- All Australian Credit Licensees;
- Unlicensed product issuers and unlicensed secondary sellers; and
- Superannuation trustees.
Has IDR reporting commenced?
In March, 2022 11 large financial firms (initial tranche) were chosen to lodge their first IDR data by 28 February 2023, for the reporting period 1 July 2022 to 31 December 2022.
Reporting deadline for all other financial firms?
ASIC has introduced a staged approach for the remaining financial firms (those not in the initial cohort), being:
Reporting period: 1 July 2022 to 31 December 2022. Who: Initial tranche. Deadline for lodgement: 28 February 2023
Reporting period: 1 January 2023 to 30 June 2023. Who: Second tranche. Deadline for lodgement: 31 August 2023
Reporting period: 1 July 2023 to 31 December 2023. Who: Third tranche. Deadline for lodgement: 29 February 2024
This means all Licensees will be reporting their IDR data to ASIC by the end of February 2024. The updated timeline provides Licensees with more time to prepare for this reporting obligation.
What is the deadline for IDR reporting?
A reporting period is defined as a period of 6 months, ending:
- 30 June; and
- 31 December.
As mentioned earlier, ASIC has provided an extension for your initial IDR lodgement, meaning Licensees have 2 months after the end of the reporting period to lodge their data. All future reporting periods must lodge by the end of the following calendar month, the table below will help Licensees in the third tranche:
Reporting period: 1 July 2023 to 31 December 2023. Deadline for lodgement: 29 February 2024.
Reporting period: 1 January 2024 to 30 June 2024. Deadline for lodgement: 31 July 2024.
Reporting period: 1 July 2024 to 31 December 2024. Deadline for lodgement: 31 January 2025.
What complaints need to be reported?
ASIC has specified the data to be included within your reporting period, Licensees should report on:
- Complaints covered by your IDR procedure, and
- Complaints made either in the reporting period, or complaints open at any time during the reporting period.
ASIC has noted that complaints received before the beginning of the first IDR reporting period should not be included within your data. Meaning third tranche firms will not include data about complaints received before 1 July 2023, this includes complaints that are open at the start of the initial reporting period.
In the event a client escalates their complaint to AFCA after going through your IDR process, the IDR complaint is included within reporting for that period. Any revised outcomes, timeframes or other details about the complaint at EDR level (AFCA) will be out of scope for IDR reporting, i.e. you do not include the complaint again.
What happens if there is no complaint data for the reporting period?
Licensees will still be required to submit a ‘nil submission’ through ASIC’s Regulatory Portal, ASIC’s IDR data reporting handbook provides Licensees with step by step guidance.
What data is required?
ASIC released the IDR Data Reporting Handbook which sets out the mandatory IDR data reporting obligations, including how to collate IDR data and lodge it with ASIC.
The handbook provides Licensees with information on:
- the data reporting process;
- the IDR data dictionary;
- the IDR data glossary; and
- step-by-step instructions on how to submit IDR data to ASIC via the ASIC Regulatory Portal.
Licensees should familiarise themselves with the requirements, formatting and codes to ensure your IDR report will meet ASICs requirements for lodgement. To successfully submit an IDR report your report must pass two stages of validation before being accepted by ASIC. Until a report has passed both of ASIC’s validation checks, it will not be deemed to have been lodged. ASIC will send an email notifying firms if their submissions has passed or failed the deep validation.
For those clients that have subscribed to OpenAFSL, you will be pleased to know our system is coded and ready to report when you are.
For those clients that haven’t subscribed to OpenAFSL, well I am afraid you will need to familiarise yourself with ASIC’s additional resources:
- IDR Data Reporting Excel template
- IDR Validation Rules examples
- IDR data reporting handbook; and
- ASIC FAQs
IDR reporting for multiple licence holders
Where a parent company has multiple subsidiaries with AFSLs, the parent company cannot submit a consolidated or aggregated IDR report. Each AFSL will need to submit their own IDR report to ASIC.
An exception for AFSLs that hold both an AFS licence and a Credit licence (with the same number), they are able to submit a consolidated report to ASIC each reporting period.
IDR information published by ASIC
ASIC will not publish IDR data until all Licensees have commenced reporting, which is after 29 February 2024.
ASIC will analyse the IDR data as it receives the information and will communicate its final approach well in advance of publication.
What should you be doing now?
February 29, 2024 will be here before you know it. The reporting period commences 1 July 2023, which is not far away. We suggest you take some time now to ensure:
- Your IDR process meets RG 271 requirements, if you are unsure in anyway, now is the time to get in contact with us.
- Your complaint register is capturing all the relevant information in a format required to report your data to ASIC. If you don’t have the time or expertise, get in contact with us, OpenAFSL can and will assist you in this area.
- Your staff are clear about the definition of a complaint. Take the time to run through your IDR policy, processes and system, you want to be sure any complaints received are being properly identified, dealt with and recorded in accordance with your IDR process. If you need assistance we can run a training session or provide you with the necessary knowledge and material to run your own training session.