National Consumer Credit Protection (NCCP) Act came into act on 1 July 2010. The first stage of this legislation involved all parties involved in the credit process registering with ASIC. From 1 January 2011, all people and entities providing credit advise are required to either hold an Australian Credit Licence (ACL) or operate as an Authorised Representative of a licence holder. (MFAA/FBAA memberships, their renewals, lender agreements aggregator agreements and PI renewal will also require you to show compliance).
You have two choices under the new legislation:
- Become a Licence Holder
- Become an authorised representative under a licence.
Either option will require you to be registered with ASIC and obtain a Certificate IV in Financial Service – Mortgage Finance (FNS 40815) or Diploma in Financial Services -Finance Mortgage Broking Management (FNS50315) or equivalent.
1. Become A Licence Holder
If you are thinking of obtaining a licence, it would need to be the same legal entity that the agreement has with your aggregator and any lenders, or you would need to appoint that entry as an authorised representative. (i.e. the company or trust that has the agreement).
Employees and directors of a licensed entity are automatically covered by the licence, but may choose to register as Authorised representatives. Any contractors are required to be registered as Authorised representatives or hold their own ACL. If you hold the license you are responsible for the entire compliance requirements, processes training and record-keeping etc for you and all the authorised representatives under your licence.
Applying for a licence you will be required to provide along with the application three “checks” to show you are a “fit and proper person” these are:
- Class 25 Federal Police Check – ASIC Financial Services Licensing Requirements – Valid 12 month – this is a different check to ones you might have previously had done.
Bankruptcy Check (ITSA Bankruptcy check is conducted through a government) – Valid 12 month – This is new and has not been previously required by anyone
VEDA credit check – Valid 3 months
A minimum educational standard of Certificate iv in Mortgage and Finance Broking (FNS 40815 or equivalent)
Professional Indemnity Insurance
Membership of an external Ombudsman Service Generally COSL or FOS
2. Become an authorised representative under a licence
Several aggregators and groups will offer you the opportunity to become an authorised representative under their licence. Groups will have slightly different requirements and costs associated to manage their Authorised representative’s compliance. They would generally require credit and police checks.
As an authorised representative you will have no option to do any sort of credit business that is not authorised by the licence or on their panel of lenders.
To assist with this process we are agents for the required agencies including the Federal Police. The ITSA and Veda report we can get instantly online for you. We will provide an updated VEDA check for you if necessary (Veda is only valid for 3 months, the other checks are 12 Months).
Further information is available – click here
Please feel free to call our office if you would like to discuss what the licensing all means and your options.