Following the release by ASIC in May 2009 of revised regulatory guides on dispute resolution schemes (RPG 139 and RPG 165) new dispute resolution “compensation caps” under which all EDRs will be able to hear claims up to the value of $500,000 will commence on 1 January 2010, even though the amount of compensation they can award is less.

From 1 January 2012, EDR schemes will only be allowed to limit (cap) the maximum amount of compensation payable per claim to a minimum of $280,000 (or $150,000 if the claim relates to an insurance broker) with the ability to opt for a higher figure in the rules of the scheme.

See Table 2 here for details of the transition for each EDR scheme.

The Terms of Reference for the Financial Ombudsman Service have changed.

Disputes lodged with it on or after 1 January 2010 will be considered under the 2010 Terms of Reference.

Its maximum amount of compensation for banking and finance and mutuals claims will remain at $280,000 until 1 January 2012.

Disputes lodged with the Financial Ombudsman Service before 1 January 2010 will continue to be considered under the previously applicable Terms of Reference.

The Financial Ombudsman’s latest eNews contains some helpful case studies including its approach to customers in financial difficulty (here), credit card charge backs and whether a stockbroker had a reasonable basis for its advice to consumers to invest in a scheme.

ADI’s which established securitisation arrangements under old APS 120 (Prudential Standard APS 120 Funds Management
and Securitisation made on 30 May 2006 which has been revoked since 31 December 2007) must complete the transition to new APS 120 by 30 June 2010.

If APRA allowed a lower capital requirement or compliance with the old standard that exemption must expire by 30 June 2010. If the arrangement does not comply by 30 June then APRA will impose a higher capital requirement or the ADI can re-document the arrangement so that it does comply with APS 120.

Langes can assist ADI’s with assessing compliance with APS 120.

Austrac has released an Instruction Guide and a sample AML/CTF Compliance report 2009 due to be lodged with Austrac between 1 January and 31 March 2010 for the 2009 calendar year.

In particular Austrac asks whether an independent review of your AML/CTF program was conducted by an external party. Langes can assist you with this.

Thank you for reading our news services over the past year. On behalf of the Langes+ team I wish you a happy, successful and healthy 2010.

If you are taking an extended break, we look forward to talking to you on your return.

Langes+ services will be available over the holiday season.

Predictions for 2010? The one thing I can predict for 2010 (apart from a Commonwealth election) is more demands on directors and managers and more regulatory change.

Over the next few weeks ask yourself what is your most pressing challenge (business, legal or otherwise) that you'd like to overcome in the next year and think about whether you are adequately prepared.

The Federal Government has responded to the Productivity Commission report – Annual Review of Regulatory Burdens on Business: Social and Economic Infrastructure Services .

The Productivity Commission's concerns covered a wide range of regulated schemes and activities relating to the social and economic infrastructure sector, including: aged care; child care; information media and telecommunications; electricity, gas, water and waste services; transport; education and training; and medical services.

Of the Productivity Commission's 42 recommendations, the Government has accepted 21 and accepted a further 5 in principle. Of the remaining responses 12 were noted, mainly reflecting the Government’s existing reform agenda, while four responses were not accepted.

The Australasian Mutuals Institute (AMInstitute) Mutual ADI Directors’ Compliance Manual is maintained by Langes+ for the exclusive use of AMInstitute members.

The Manual covers 53 areas of law and topics of interest for AMInstitute members.

Langes+ keeps the Manual up-to-date.

The Manual is available only from AMInstitute. Download order form.