Background
The IDR data reporting framework applies to the following types of financial firms:
- AFS licensees that provide financial services to retail clients
- Unlicensed product issuers and secondary sellers
- Superannuation trustees
- Credit licensees
In early 2023 implementation of the IDR data reporting framework began with a first group of 97 large financial firms, including some banks and superannuation funds. A second group of around 260 financial firms must submit their first IDR data report to ASIC by the end of August 2023. The balance of financial firms must submit their first IDR data report to ASIC by 29 February 2024. Upon commencement of reporting, the financial firms have an ongoing obligation to lodge an IDR data report with ASIC every six months.
In depth
Pursuant to the ASIC Corporations (Internal Dispute Resolution Data Reporting) Instrument 2022/205 (the Instrument), a financial firm is required to provide ASIC with their IDR data information through ASIC's Regulatory Portal within two months after the end of each six month reporting period (ending on 30 June or 31 December). 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. 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.
Where there have been no complaints made during a reporting period, the financial firm must still report to ASIC with a confirmation that no complaints have been received. While the Instrument, as well as the ASIC Corporations (Amendment) Instrument 2023/282, expressly stipulated the firms required to report in the first two tranches, the third tranche is to cover all remaining firms. This staged implementation of the IDR framework, with smaller entities being final on the list required to submit their IDR data, has given smaller entities greater time to prepare for the reporting obligations.
Next steps
All financial firms should familiarise themselves with the IDR data reporting handbook and perhaps look to adopt ASIC's 'IDR data reporting Excel template' in order to ready themselves for their first reporting period commencing 1 July 2023.
Ultimately, the effective implementation of the IDR data reporting framework is set to give ASIC greater insight into where consumers are experiencing harm. ASIC has stated that it will not publish IDR data until after 29 February 2024 when all financial firms have commenced reporting. ASIC has yet to provide details on how and in what format IDR data will be published but has advised that it will communicate its final approach well in advance of publication.
