Below we have set out some key regulatory changes that should be on your radar for the first quarter of this year.

AFCA publishes new approach documents 

AFCA have now released its long awaited approach documents dealing with responsible lending for consumer loans, and appropriate lending for small business loans – see AFCA approach documents | Australian Financial Complaints Authority

Given AFCA is the first port of call for most responsible lending / appropriate lending complaints, understanding AFCA’s approach when dealing with such complaints is vital for all lending businesses who are members of AFCA.

Increased monetary limits for AFCA complaints – from 1 January 

AFCA increased the monetary limits and compensation caps for complaints received from 1 January 2024. 

These updated limits mean that AFCA can consider disputes where the amount claimed by a consumer is less than AU$1,263,000, and the amount claimed by a small business or primary producer on a credit facility is less than AU$6,317,000.

The limit on the amount of compensation AFCA can order per claim have also increased and differ depending on the type of claim – see AFCA complaint monetary limits updated | Australian Financial Complaints Authority (AFCA)

IDR data reporting window now open – reports due to ASIC by 29 February 

In-scope financial firms (being all AFS licensees who provide financial services to retail clients and all Australian credit licensees) are required to submit IDR data to ASIC covering the period 1 July 2023 to 31 December 2023 no later than 29 February 2024.  

For the majority of financial firms (i.e. those part of ‘Tranche 3’), this will be the first IDR data set reported to ASIC.

Importantly, the report must comply with ASIC’s formatting requirements (per the ASIC IDR data reporting handbook) and must be submitted through the ASIC Regulatory Portal. Non-compliant IDR reports may not pass validation.

Reportable situations regime – time to get your house in order 

In its latest publication on the reportable situations regime, ASIC identified that only 11% of licensees have lodged a report since the commencement of the regime in October 2021. This clearly indicates that many licensees do not have in place the systems and processes required to detect and report breaches to ASIC, as required by law. 

In response to its findings, ASIC has commenced surveillance activity targeting licensees who may not be meeting their obligations. This surveillance will have a particular focus on licensees who are not reporting or are reporting significantly less than expected.

Licensees should be regularly reviewing compliance, and ensuring policies and procedures are up to date with the current law and ASIC guidance.

And finally, do you need more CPD points?

If you’re a lawyer and still need more CPD points for the year Dentons is presenting an In-House Counsel 2024 Webinar Series in March.

This series offers nine sessions across all CPD categories and focuses on current and emerging issues across the legal landscape. 

To register for any of the sessions, please register via: Dentons - In-House Counsel CLE – 2024 Webinar Series: Australia