Australia AFCA to Reveal Firms Involved in Investment Disputes

New rules that reveal names of Australian investment firms involved in consumer disputes, designed to enhance AFCA’s disclosure, have been approved by .
The Australian Securities and Investments Commission () has approved changes that allow the Australian Financial Complaints Authority (AFCA) to identify the firms about which it makes determinations while keeping the names of those making the complaints anonymized.

“ASIC’s view is that naming firms in determinations can help identify conduct or market problems within firms or affecting specific products or services, as well as highlighting where firms have done the right thing. It will also enhance transparency and accountability of firms’ performance in complaints handling and of AFCA’s own decision-making,” the watchdog said in its latest newsletter.
The policy change, which also extends to , will apply to disputes that have been accepted and resolved by AFCA. It will include the names of the service providers involved in AFCA’s complaints unless the action would expose other parties or for any other reasons that regulators deem appropriate.
Big firms, industry associations are concerned
The dispute resolution body explains that the revised rules will achieve better outcomes, allowing investors to know which firms were responsible or have contributed to the raising of a complaint. Consumer advocates have also welcomed the changes, saying it would help inform the public what the raw number of disputes were about and whether they were upheld in favour of the complainant.
However, some industry associations were concerned that firms or brokers with larger market share could be unfairly disadvantaged as it ignores the fact that large businesses are likely to receive more complaints. Investment brokers offering may also receive more disputes.
The AFCA also revealed that it had a very busy first six months of operation. The newly-established ‘one-stop-shop’ for resolving financial complaints said it has received 35,263 complaints, but expects around 5,000 disputes to be resolved each year by way of determination.

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