“You must stop engaging in credit activities until you either become registered or have an Australian credit licence.”
As registration draws near for any business or individual involved in lending, finance broking or credit, you will need to decide if you are going to apply for a licence or become a representative of a licence. If you are not registered by the 1st July ASIC state that “you must stop engaging in credit activities until you either become registered or have an Australian credit licence.”
The decision as to whether you obtain your own licence is one that you should put some serious thought into and will depend on several factors. One of the main factors would be do you want the responsibility of all the compliance issues or leave it to some one else. And can you comply?
Other factors would be who your aggregator is and will they will allow you to become a representative, and what does your business involve. For example do you have loan writers or brokers working for you, and do you want to be completely responsible for them. Even if your group would prefer to have you as a representative, do you want to be that closely tied to them or do you want your independence.
Several of the major aggregators and all the franchise groups contacted are expecting the majority of their brokers to become representatives of the group licence. Some of the other groups however will require individual licences to be held by their members. In the few months all people involved in the industry will need to make the decision.
Registration is open for 3 months on ASIC’s website starting from 1st April 2010 until 30th June. (ASIC state that if you register after the 18th June you might not be processed in time). Once registered and processed by ASIC a licence must be applied for before the end of 2010. ASIC Information sessions are nearly booked out but you can see the dates and register at www.asic.gov.au/credit. The ASIC regulatory guide to “Credit registration and Transition” can be accessed here. The MFAA have put together a guide available on the members site. Gadens Lawyers have also set up a licence processing system.