All eyes are now on ASIC to await how the regulator will use the internal dispute resolution (IDR) regime data submitted by licensees as the deadline is passed.
The deadline for reports was on 29 February, with many licensees reporting six months of data for the first time, even if they had no complaints.
The action had been enforced in three tranches in order for smaller firms to prepare for the obligations, with the final one applying from 1 January 2024 to cover the six-month period from 1 July to 31 December 2023.
The first tranche affected 97 firms and the second affected 260 firms, with the remainder of AFSLs due to submit by 29 February, covering each complaint received by the firm made during or open during the reporting period.
With the deadline reached, attention will now turn to those licensees who failed to make a submission on time and to how ASIC will use the data.
Failure to submit a report, which includes a “nil submission” if a firm has had no complaints, means a firm is in breach of IDR reporting and could face strict penalties. The report must also meet ASIC’s format and content specifications, or fail the automatic data validation process.
If a report fails, it is up to the licensee to resubmit a correct version in time for the deadline.
Brian Pollock, director of corporate governance at The Principals Community, said the system was harder for licensees to navigate than ASIC had expected and the portal had to be temporarily suspended while issues were corrected.
“Most of our governance clients were completed well ahead of the close-out date. Some licensees were delayed as we were seeing a range of error messages and delays in the regulatory portal relating to the IDR submission. ASIC ultimately took down the IDR facility for a few days to correct this.”
He had previously shared that The Principals Community had been working with licensees to provide templates and check forms to ensure they got it right in time for the deadline.
ASIC told Money Management that as of 28 February, it did not have numbers yet on how many reports had been submitted, but will be “collecting and considering” the data and provide more information in due course.
The data provided by the IDR reports will be used by ASIC to improve its capabilities as a data-driven regulator and give greater visibility of where consumers experience problems or harm.
It will also provide it with more data about each of its licensees and will be able to reference this data with other organisations such as the Australian Financial Complaints Authority and with the reportable situations regime to identify issues.
While this deadline has now passed, this is just the beginning as licensees are reminded that there are now six-monthly reporting requirements in place which will need to be factored into their ongoing compliance work to ensure reports are up to date.
They must also remind their advisers to let them know of any complaints which need to be added to the report before they are closed out.
