Compensation Scheme of Last Resort (CSLR): Reform options to support ongoing sustainability

The CSLR plays a vital role in Australia’s financial services dispute resolution framework. A failure by a financial firm to pay compensation awarded to someone by the Australian Financial Complaints Authority (AFCA) is often a sign that something has gone very wrong with the firm. The CSLR prevents people in these situations from suffering the full cost of the firm’s professional misconduct. By preventing victims of misconduct from bearing the full cost of that misconduct, the CSLR provides consumers with confidence in the integrity of Australia’s financial system. In the wake of several recent high-profile failures, maintaining consumer confidence is more important than ever.