Regulator confirms new positions on complaint reporting

In an addendum to its Consultation Paper 311 on internal dispute resolution released on Wednesday, the regulator revealed details of feedback received to the original paper released in early 2019, and its "current positions" on data reporting questions consulted on in the paper.

Among these were the removal of an exception allowing financial firms not to record complaints that were resolved within a five-day period, meaning licensees would need to record all complaints regardless of resolution time when reporting to ASIC.

"Retaining the status quo would have: reduced transparency, as the data reported to ASIC would only be a subset of the true number of complaints; risked creating an incentive for firms to close some types of complaint prematurely, to avoid reporting and regulatory scrutiny; resulted in some complaints remaining unrecorded; and been out of step with comparable jurisdictions e.g. UK, which requires financial firms to record all complaints," ASIC said.

Further, ASIC said it was "considering whether it would be more appropriate" to require firms to report complaint data on a quarterly basis rather than every six months, as proposed in the original consultation paper.

"We are aware that many firms are already reporting about complaints internally on at least a quarterly basis," the regulator said.

The regulator said it had made a number of updates to its 'data dictionary' to align the format of complaint reports more closely with AFCA requirements, including reducing the number of data elements firms needed to input and removing some that required free text responses.

Firms would also be required to report the exact amount attached to a monetary outcome of a complaint, and the relevant adviser number where a complaint related to financial advice.

ASIC said while the new requirements technically came into effect on 5 October, they would not be enforced immediately after this date, with a pilot group of financial firms to test the data standards in the second half of 2021.

"Following the pilot, we will confirm the next steps for the implementation of IDR reporting. This will include: considering staggered commencement dates; providing for simpler reporting by smaller firms (e.g. in the form of a spreadsheet); and deciding the frequency and nature of publication of IDR data," the regulator said.

ASIC is seeking industry input into the updated positions by 12 February 2021.