A Recap of New Regulatory Changes this October for Mortgage Broking Industry

A range of new financial services law has come into force today the 5th October, including more layers of compliance when conducting your mortgage broking business.

The industry has been preparing for these reforms with aggregators and associations providing learning materials and various training to members. Check out the resources from Connective. 

Here’s a quick recap of the latest regulatory changes with the utmost transparency and timeliness. We hope the insights given help you safely navigate through the changes and be in full compliance with the law. 

Reference Checking 🧐

In the spirit of transparency, reference checking is simply a screening process licensees should undertake when deciding whether to bring a mortgage broker into their business. And of course when they leave your business, you are to provide a reference for them. It’s the only effective way to let recruiters suss out any misconduct or performance issues or any warning signs about the prospective candidate. We believe this will be beneficial to the industry as a whole. 

Breach Reporting 📝

Put that detective cap on. Have a commanding view across your whole operations. If you become aware of a ‘reportable situation’, you should alert the ASIC by filing a breach report within 30 days of first knowing that. Making it easier to report breaches is a high priority for the financial services industry now. Currently reports are submitted at the ASIC portal.

Internal Dispute Resolution (IDR) 🤝

If a customer has got a complaint to make, brokers now need to make sure they get seen by the best pair of eyes in a fair and timely manner. Broker firms must have a robust IDR system in place that outlines how they manage and resolve complaints. In other words, have a structure around how you communicate to clients if you are unable to come to a satisfactory outcome. More clarity and more communication is key. You must acknowledge the complaint within 24 hours and give a proper written response no later than 30 calendar days.

Design and Distribution Obligations (DDO) 🎯

The best part about DDO? The end of a one-size-fits-all approach to financial products. This legislation requires lenders to design appropriate financial products that meet the needs of targeted consumers. As a broker, all you need to do is access the lender’s target market determination documents as soon as they become available and make sure your customer falls within th

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