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April 27, 2010

Queensland Credit (Commonwealth Powers) Act 2010

The Credit (Commonwealth Powers) Act 2010 (Qld) was assented to on 21 April.

The Act refers constitutional power for credit (including finance broking) to the Commonwealth and repeals Queensland's own credit legislation.

However it reintroduces the 48% maximum annual percentage rate.

Queensland has not adopted either the NSW or Victorian methods of calculating the cap.

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Posted 27th April 2010 by David Jacobson in legislation

April 12, 2010

Aligning your AFSL and ACL

If you have an Australian Financial Services Licence (AFSL), your work in complying with your Australian Credit Licence (ACL) should be easier. That's because the obligations under an AFSL and ACL are very similar - almost word for word - although of course they deal with different products and services.

The attached table shows the similarities.

The conflicts of interest obligation is different. Under your ACL, you must have adequate arrangements to ensure that customers are not disadvantaged by conflicts of interest. Under your AFSL, your obligation is to have adequate arrangements to manage conflicts of interest.

There are other obligations under the Corporations Act for AFSLs and the National Consumer Credit Protection Act for ACLs which are different.

In its regulatory guide RG204: Applying for and varying a credit licence, ASIC says it expects that if you are granted an ACL, you will comply with your obligations by maintaining the same types of arrangements in relation to your credit activities as you use for compliance with your AFSL.

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Posted 12th April 2010 by Patrick Dwyer in legislation, licensing

April 1, 2010

Credit representatives during the registration period

The National Consumer Credit Protection Amendment Regulations 2010 (No. 1) amend the National Consumer Credit Protection Regulations 2010 to modify the restriction in Section 67 of the Act on a registered person being appointed as a credit representative by allowing it during the transitional period and allows a person to be appointed as a credit representative while they are still registered (regulation 25A).

Previously, a person who elected to operate as a credit representative but who initially registered with ASIC in the period from 1 April 2010 to 30 June 2010 could not be authorised to engage in credit activities until they applied to have their registration cancelled, and it has been cancelled.

However, where a person thinks that their principal will not become registered, or will not authorise them to engage in credit activities on their behalf, before the end of the registration period, they may need to apply for registration if they want to continue to engage in credit activities from 1 July 2010. The regulation avoids the need for such persons to then apply to ASIC for their registration to be cancelled before they can be authorised as a credit representative of your principal.

The regulation allows a person to authorise a registered person to act on their behalf as a credit representative where it is reasonably expected that the registered person will engage in a credit activity only as a credit representative, and seeks to avoid any gap in their business activities until their registration has been cancelled.

The regulation provides that the authorisation will cease to have effect if the registered person has not, within 15 business days from the date of authorisation, requested the cancellation of their registration.

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Posted 1st April 2010 by David Jacobson in licensing

Online credit registration now open

ASIC's online credit registration form can now be accessed here (Scroll down to "Register now").

If you're not sure whether you need to register contact Patrick Dwyer, David Jacobson, Shannon Adams or Rob Surman.

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Posted 1st April 2010 by David Jacobson in licensing