Key Documents
As part of the Future of Financial Advice (FoFA) reforms announced on 26 April 2010, the Government commissioned Richard St. John to undertake a review to consider the need for, and costs and benefits of a statutory compensation scheme. This review was announced in response to recommendation 10 of the report by the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into financial products and services in Australia.
The release of the consultation paper by Richard St. John is a key step in his preparation of recommendations to Government. Mr St. John draws attention to a number of issues on which comment is invited (raised at the end of Chapters 2 to 5). It also seeks reactions to the preliminary observations made in Chapter 5 though respondents should feel free to address other issues as well.
The consultation paper provides information, frames issues and raises questions on the need for, and costs and benefits of, a statutory compensation scheme for clients who suffer damage or incur loss as a result of misconduct by persons with whom they have dealt in the financial services sector. In particular:
- Chapter 1 deals with the context and scope of the review. It also provides background on the overall regulatory framework for financial services and the regulatory philosophy on which it is based.
- Chapter 2 describes the current compensation arrangements within that regulatory framework.
- Chapter 3 addresses the operation of those compensation arrangements in practice.
- Chapter 4 provides a comparison with compensation arrangements in other countries and industry sectors.
- Chapter 5 provides some preliminary observations and draws out issues for further consideration.
- Attachment A provides a summary of relevant regulations.
- Attachment B provides a summary of compensation arrangements in the EU, Canada and the US.