Credit registration and transition
- Registration will be via secure online application on the ASIC website.
- Information about the applicant (and/or its partners, directors as applicable), their contact details, their current operation and a contact person must be provided.
- Successful registration will be notified by email only and will be entered on the Australian Credit Register.
- Your obligations include:
- compliance with credit legislation and conditions on registration.
- maintenance of EDR scheme membership.
- liability for conduct of representatives.
- proper maintenance of financial records.
- Registration is then cancelled upon granting of a licence, or refusal of the licence application, or by 30 June 2011 at the latest.
Do I need a credit licence?
- A credit licence is required if you provide credit by way of credit contracts or consumer leases, or where you benefit, for example, from a mortgage related to a credit contract, or, provide credit services. Broadly this covers two categories – credit providers (lenders and lessors) and providers of credit services (finance brokers, mortgage managers and aggregators).
- There are some exemptions, e.g. lawyers, registered tax agents provided certain criteria are met.
- A credit licence is not required by authorised credit representatives or employees/directors of a licensee (or one of its related bodies corporate) who are engaging in credit activities on behalf of the licensee.
- Credit representative authorisation must be in writing and the licensee is liable for representatives’ conduct and competence.
Applying for and varying a credit licence
- You can apply for a licence online on the ASIC website. Paper applications will only be accepted with pre-approval, but will take longer to process and cost more.
- Ongoing access to the application will be via a user name, password and reference number.
- The application will be tailored to the entity type and some information may be pre-filled.
- Information sought will include:
- entity type (company, partnership, multiple trustee or natural person)
- address and contact details
- business names
- credit activities authorisations sought
- size and nature of business activities
- Information sought about compliance with general obligations will include the identification of ‘fit and proper people’ and ‘responsible managers’ and their competence and attributes, and confirmation of adequate compliance plans including written plans, monitoring and reporting and the people responsible. If functions are outsourced, the applicant must also confirm appropriate processes exist to ensure due care and skill in selection and monitoring of the provider’s performance. Other confirmation sought will include:
- arrangements for supervision and training of representatives
- dispute resolution and hardship applications processes
- adequate risk management systems
- satisfactory compensation arrangements (PI insurance for most)
Supporting documentation required will include:
- Statements of Personal Information for fit and proper people
- Evidence of adequate knowledge and experience for responsible managers (eg details of qualifications)
- Background checks for fit and proper people including criminal history checks, bankruptcy checks and credit history reports
- Summary of business description including how the business will operate in practice (eg number of offices, distribution model, remuneration structure)
- ASIC must offer a hearing prior to refusal. If unhappy with the outcome, applicants may apply to the Administrative Appeals Tribunal.
- You may apply for a variation of your credit licence if your business changes or you want to change a licence condition. This will be an online process like the original application.
