Countdown is on for IDR reporting to ASIC

The new IDR data reporting framework now applies to all financial firms, with the final tranche of firms required to submit their IDR reports to the Australian Securities and Investments Commission (ASIC) for the first time by 29 February 2024.

Financial firms have been required to record all complaints received and to have an effective system for recording information about complaints since 5 October 2021, in compliance with Regulatory Guide 271 internal dispute resolution (RG 271).

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 must now submit their first IDR data report to ASIC by 29 February 2024. All Australian Financial Services (AFS) licensees with a retail authorisation and all Australian credit licensees are included in this group and now have an ongoing obligation to report the data every six months, starting with the 1 July 2023 to 31 December 2023 period.

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,” said law firm Baker McKenzie.

“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 licenses to ASIC for each reporting period.”

Financial firms must also report to ASIC even if there have been no complaints during a reporting period.

In May last year, ASIC delayed the timeline for smaller firms to meet the requirements, pushing back reporting six months for thousands of firms.

“We reached a significant milestone early in 2023 when the first group of licensees reported IDR data to ASIC. The staged implementation will see most large financial firms reporting IDR data to ASIC by August 2023,” commented ASIC deputy chair Karen Chester at the time.

“Importantly, those firms account for the large majority of consumer complaints made through IDR. The staged implementation will also allow more time for many smaller firms to prepare for the start of their reporting obligations.”

As part of the changes, ASIC confirmed that it will not publish IDR data until all financial firms have commenced reporting after 29 February.

The regulator said it would be analysing the data to inform its final approach to publication and will communicate its final approach “well in advance of publication”.

“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 Ms Chester.

“It will be an invaluable resource for ASIC, industry, consumer groups, and ultimately consumers themselves.”