ASIC improves access to dispute resolution scheme
The Australian Securities and Investments Commission (ASIC) has introduced a number of changes to its dispute resolution schemes to improve consumer access.
The changes will require schemes to deal with claims of up to $500,000 and increase the minimum amount of compensation for investment advice complaints to $280,000. The new rules will come into effect in January 2010 and January 2012 respectively.
The current external dispute resolution (EDR) scheme bars any complaint being brought which involves more than the $280,000 compensation limit.
ASIC said in a statement that the current compensation caps of $150,000 for investment advice complaints were inadequate due to the significant increase in retail investors' portfolios in recent years.
The EDR schemes will also be able to choose whether they cancel a member’s ASIC membership, improving the complainant’s access to dispute resolution schemes even in the case of a corporate collapse, and EDR schemes will need to publish statistics on the number of complaints received against individual EDR scheme members.
“The increase in claim limits and compensation caps in EDR schemes will ensure many more consumers and retail investors will be able to bring their claims to EDR schemes, avoiding the expense of litigation,” said ASIC deputy chairman Jeremy Cooper.
AUTHOR
Benjamin Levy
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