The Australian Securities and Investments Commission has approved variations to the Banking Code of Practice, at the request of the Australian Banking Association.
The Banking Code of Practice is a self-regulatory document created by the banking industry, as represented by the Australian Banking Association (ABA). It is administered by an independent Code monitoring body, the Banking Code Compliance Committee (BCCC). The code sets out standards of practice and service in the Australian banking industry for individual customers, as well as customers that are small businesses. ASIC does not administer it.
ASIC approved the ABA's code by issuing the ASIC Corporations (Banking Code of Practice) Instrument 2018/700. In 2019, the ABA proposed some updates which ASIC approved in June. In December 2019, the ABA proposed further updates which ASIC approved in March 2020.
Since then, the ABA has applied for ASIC’s approval, under the new subsection 1101AA(1) Corporations Act, for further variations of the March 2020 Code. The variations are designed to:
- extend the operation of the Covid-19 Special Note for six months to September 2021 (instead of 1 March);
- address an anomaly in the code’s definition of ‘banking service,’ which previously had the unintended effect of carving out certain types of businesses that would otherwise, but for a technicality caused by the interaction with the definition in the code and Chapter 7 Corporations Act, have ‘code protection’;
- make refinements to the code’s definition of ‘small business’;
- in clause 163, set out circumstances where a bank may decline, if experiencing financial hardship, to deal with a customer’s appointed representative and instead deal directly with the customer once again;
- insert a definition of ‘financial counsellor’ for the purposes of clause 163; and
- align the timeframes that banks have to respond to complaints in accordance with the code with the timeframes in ASIC’s new Regulatory Guide 271 Internal dispute resolution, which is due to commence on 5 October 2021.
ASIC has approved the ABA’s variations to the March 2020 Code by issuing an instrument known as the ASIC Corporations (Approval of Variation of March 2020 Banking Code of Practice) Instrument 2021/11.
ASIC is satisfied that the BCCC's administrative systems are good at monitoring compliance with the code and that the ABA's systems are good at maintaining, and making publicly available, an accurate list of subscribers to the code. The Approval Instrument does not identify any ‘enforceable code provisions’ in accordance with subsection 1101A(2).