Stockbrokers and Financial Advisers Association (SAFAA) has welcomed the government’s announcement that it will remove the requirement for distributors to report ‘nil complaints’ to issuers.
Under the legislation dealing with Design and Distribution Obligations which comes into effect on 5 October 2021, SAFAA’s members who are distributors of financial products were required to report on a regular basis to product issuers about complaints received about their products. They also had to report that no complaints about the product were received.
‘SAFAA has been advocating for a change to the DDO regime to exempt distributors from the requirement to provide ‘nil complaints’ reports to issuers,’ stated SAFAA CEO, Judith Fox. ‘The requirement to report ‘nil complaints’ was a significant and unnecessary regulatory burden placed on distributors from which issuers would not gain any benefit,’ Ms Fox stated.
Stockbrokers and investment advice firms distribute products such as ETFs, TraCRs, warrants and mFunds from hundreds of issuers. Each of these issuers has multiple products, resulting in many hundreds of ‘nil complaints’ reports needing to be sent every quarter, as SAFAA members receive very few complaints about these products.
‘The work involved in setting up a system to communicate these reports to issuers was proving to be costly and burdensome,’ Ms Fox said.
‘SAFAA’s members are pleased that the government has listened to them and made a common sense decision to cut unnecessary red tape,’ she said. ‘Both distributors and issuers can now focus on complaints, rather than the fact that no complaints have been received in relation to particular products.’
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The Stockbrokers and Financial Advisers Association (SAFAA) is the professional body for the stockbroking and financial advice industry. Our members are Market Participants and Advisory firms that provide securities and investment advice, execution services and equity capital-raising for Australian investors, both retail and wholesale, and for businesses. Practitioner Members are suitably qualified professionals who are employed in the securities and derivatives industry.