ASIC has released a consultation paper (CP 138) seeking public comment on dispute resolution arrangements required of trustee companies providing traditional services, like preparing wills.

Under the Corporations Act 2001, trustee companies as Australian financial services (AFS) licensees, must have an internal dispute resolution (IDR) system for handling client complaints and be a member of an ASIC-approved external dispute resolution (EDR) scheme from 1 May 2011.

Some of the key proposals on which ASIC is consulting include:

• whether to set a higher compensation cap (than otherwise applies under external dispute resolution (EDR)) where complaints involve beneficiaries. This is because deceased estates would commonly include the family home and a mix of other assets;
• ensuring that scheme outcomes are effective for complaints involving more than one beneficiary by requiring all beneficiaries to agree to the EDR scheme hearing the complaint; and
• what exclusions from EDR scheme jurisdiction should apply to trustee companies providing traditional services.

UPDATE: ASIC has also released Consultation Paper 139 setting out how it proposes to administer the compensation requirements for trustee companies providing traditional services to retail clients.