What is an Australian Credit Licence?
If you engage in credit pursuits, you will usually need to hold an Australian Credit Licence (ACL) or become an Authorised Credit Representative (ACR) of a licence holder. This includes anyone lending money, or any go-between person lending the money and the person receiving the money, which covers brokers.
If you are starting in financial services, the essential requirement is the Certificate IV in Finance and Mortgage Broking nevertheless you cannot directly apply for an ACL with the Australian Securities and Investments Commission (ASIC). The reason is that you need finance experience as an authorised rep to be qualified to apply.
How do I get an Australian Credit Licence (ACL) or become an Authorised Credit Representative (ACR)?
The corporation assessing applications of the Credit Licenses is the Australian Securities and Investment Commission (ASIC). They ensure the possible licensee can show they comply with the licence conditions in the credit legislation (RG206). If you’re interested, you can read the Regulatory Guide 204 which describes what you are required to do, to apply for a credit licence (all 78 Pages) or you can call us on 1300 136 947.
Most brokers work under their aggregator’s ACL because of the challenge in getting approved for a credit licence. The other problem is the continuing administrative expenses and compliance obligations you need to meet. This indicates you would need to apply to become a credit representative instead. But, if you’re a PAYG mortgage broker operating under a brokerage that is a credit representative of an aggregator, you are not required to become an ACR as well, your employer will automatically cover you along with the costs.
Fundamental requirements to get an Australian Credit Licence
- Have completed a Cert IV and commit to undertaking 20 hours of continuing professional development each year.
- Provide a credit and police history check.
- Be a member of an External Dispute Resolution (EDR) membership. (AFCA).
- Hold current Professional Indemnity Insurance (PI Insurance).
- Be a current member of an industry association (MFAA/FBAA.)
- Provide proof of identity.
- Provide your Australian Business Number (ABN).
- Show that you are a “fit and proper Person” under the requirements of ASIC
- Show you have at least 2 years experience in providing credit advice
For further details on how to get an Australian Credit Licence call us:
Requirements to Become a Credit representative
- Complete a Cert IV and commit to undertaking 20 hours of continuing professional development each year.
- Carry out a credit and police history check successfully.
- Apply for External Dispute Resolution (EDR) membership. (AFCA).
- Obtain Professional Indemnity Insurance (PI Insurance).
- Join an industry association (MFAA/FBAA.)
- Provide proof of identity.
- Organise your Australian Business Number (ABN).
- Sign a sub-origination agreement.
- Obtain a Credit Representative number or Credit License.
- Choose an aggregator.
- Get a mentor.
For further details on becoming a Credit Representative call us:
ACL holder obligations
Your licensee (the ACL holder) will undertake your background checks and provide written consent to you to confirm that you have been accepted as an ACR.
It’s the ACL holder that needs to notify ASIC of the appointment including:
The date of authorisation.
Your Credit Representative number.
Your name, date and place of birth, or body corporate name and ABN.
Your principal business address (and an alternative address if applicable)
Details of your EDR scheme membership.
An ACL holder has the following ongoing obligations (unless an exemption applies):
- ensure that credit activities are engaged in efficiently, honestly and fairly manner;
- conflict of interest arrangements;
- comply with any licensing conditions;
- comply with credit legislation;
- maintain competence to engage in credit activities;
- ensure representatives are adequately trained;
- internal dispute resolution procedures;
- member of an approved EDR scheme;
- compensation arrangements (including professional indemnity insurance) for violations of its obligations;
- adequate and documented compliance arrangements and systems;
- sufficient resources and proper risk management systems;
- cite its ACL number on documents;
- regular reporting to ASIC;
- breach reporting to ASIC within ten business days; and
- financial record-keeping.