ob体育 today released a draft updated and expanded regulatory guide to consult on the way licensees should conduct remediations to return money owed to consumers.
The draft guidance is an important step to improving remediation across the financial services industry. Proactive remediation upon discovery of misconduct or other failures is necessary for licensees to achieve good outcomes for their consumers and comply with their licensing obligations to act efficiently, honestly and fairly.
ob体育 Deputy Chair Karen Chester said 鈥楻ecent experience has shown that poor conduct has significant financial implications for companies, their investors, and ultimately their customers. This is demonstrated by the costly lag and drag of remediation and reputational damage.鈥�
鈥楻ight now, ob体育 is monitoring 64 remediations that will see the return of about $5.4 billion to more than 5.6 million consumers upon finalisation. There are many other remediations that are dealt with by firms without any ob体育 involvement.鈥�
鈥榃e want our new guidance to help firms remediate with greater confidence and speed. Importantly, we have expanded our guidance to cover all financial services licensees, credit licensees and retirement service providers. Our draft guidance sets out how all licensees should act to ensure their remediations are conducted efficiently, honestly and fairly鈥�, said Ms Chester.
The draft guidance is comprehensive and makes allowance for licensees to tailor it to the circumstances of their particular remediation. It has been informed by ob体育鈥檚 operational experience and benefitted from extensive earlier consultation.
鈥楲icensees must do better at identifying and remediating problems earlier. One of the most common stumbling blocks we have seen across remediations is underinvestment in systems. This underinvestment has led to multiple failures. First and foremost, in delivering on promises to consumers, second in identifying the failures and third in being able to remediate consumer loss in a timely way,鈥� said Ms Chester.听聽
The consultation process
Today鈥檚 release of Consultation paper 350 Consumer remediation: Further consultation (CP 350) follows ob体育鈥檚 earlier consultation through聽Consultation Paper 335 Consumer remediation: Update to RG 256 (CP 335) which was published on 3 December 2020.
ob体育 received 31 non-confidential submissions in response to CP 355.
Responding to feedback from industry, among other things ob体育 has incorporated additional examples into the draft guidance to give greater clarity.
CP 350 seeks feedback on the draft consumer remediation regulatory guide which in turn reflects consideration of the feedback received on CP 335. ob体育鈥檚 response to the feedback is set out in detail in Report 707 Response to submissions to CP 335 Consumer remediation: Update to RG 256.
Comments should be sent by 5 pm on Friday 11 February 2022 to聽[email protected].听
Download
CP 350 Consumer remediation: Further consultation
Draft RG 000 Consumer remediation
REP 707 Response to submissions to CP 335 Consumer remediation: Update to RG 256
Background
ob体育鈥檚 first consultation paper CP 335 outlined ob体育鈥檚 proposed updates to Regulatory Guide 256:听Client review and remediation conducted by advice licensees (RG 256). Submissions on the initial consultation closed on 26 February 2021.
At the same time ob体育 also released , a field guide that helps licensees with the day-to-day design and execution of consumer-centred remediations. This field guide may be read in conjunction with RG 256 and the updated final guidance once published.