Our Responsible Manager seminars will be held in Brisbane, Sydney, Melbourne and Adelaide in February.

Topics have been selected for their relevance for Responsible Managers. It is a practical guide to the most recent changes and topical issues affecting financial services and credit licensees, including latest cases, legislation, regulatory developments and other tips on how to prove compliance to ASIC.

Attendance will count towards CPD points.

More information and to register

Compliance with other relevant laws is a core credit licence obligation under Section 47(1)(d) of the NCCP Act.

From 6 June 2012 ADI’s which do not comply with the new price signalling laws in the Competition and Consumer Act in relation to their credit activities will not only risk a fine of up to $10 million but also breach their credit licence.

The new laws prohibit anti-competitive price signalling and other information disclosures in activities undertaken by an Authorised Deposit-taking Institution when taking deposits, (otherwise than as part-payment for identified goods or services) and lending money.

The Competition and Consumer Amendment Act (No. 1) 2011 prohibits both the private disclosure of pricing information between competitors and disclosures which take place in the public domain and/or are related to information other than pricing information if they were made with the purpose of substantially lessening competition.

Exemptions include:

•Disclosures in the ordinary course of business (eg advertising)
•Discussions between credit providers and credit service providers and for insolvency purposes

But pricing discussions between competitors in relation to interest rates and fees and charges will be regulated. More

What other laws are relevant to compliance with your credit licence conditions?
• ASIC Act;
• Banking Act;
• AML/CTF Act;
• Privacy Act (credit reporting provisions).

In respect of the Privacy Act, it is worth noting the recent case of Q and Financial Institition [2011] AICmrCN 11 relating to the improper disclosure of a borrower’s personal information.

ASIC has released a revised version of Regulatory Guide 206 with a modified policy on representative training for credit providers that provide home loans.

The main change to RG 206 is to replace the term ‘mortgage broking services’ with the term ‘home loan credit assistance’, (which ASIC defines as credit assistance in relation to a credit product where the credit is secured by real property) and to permit a representative only providing credit assistance in relation to home loans offered by their own licensee (as opposed to representatives of intermediary mortgage brokers) to complete training in the form determined appropriate by the licensee, subject to certain qualifications.

The revised RG 206 make changes to the requirements for the qualifications of representatives, ongoing training for representatives, the type of training for representatives and the qualifications of responsible managers of credit licensees.

ASIC has not changed its policy regarding qualifications for responsible managers of independent mortgage brokers or representative training for the intermediary mortgage broking sector.

We will discuss the changes at our Responsible Managers seminars in February 2012.
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ASIC has exempted rural financial counselling and money management service providers from licensing requirements for providing credit assistance under the National Credit Act: [CO 11/926].

Money management service providers who give financial advice about basic deposit products in the course of providing a money management service have also been granted limited relief [CO 11/927] from licensing requirements under the Corporations Act 2001 .

Rural financial counselling services are available to primary producers and rural small businesses in financial difficulty and are funded in whole, or in part, by the Commonwealth Government through the Department of Agriculture, Fisheries and Forestry (DAFF) or, in Queensland, through the Department of Employment, Economic Development and Innovation (DEEDI).

Money management services are provided predominantly to improve the financial knowledge and skills of consumers, principally Indigenous consumers in regional and remote Australia. These service providers are funded in whole, or in part, by the Commonwealth through the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA).

ASIC’s exemptions are subject to important conditions, namely that:

• the regulated service is provided to the consumer as part of a rural financial counselling or money management service;
• no fees or charges are payable by the consumer for any aspect of the rural financial counselling service or money management service;
• the service providers do not engage in any credit activity or financial services business beyond the scope of these exemptions, and take all reasonable steps to ensure that none of their employees do so; and
• the service provider ensures its representatives have undertaken appropriate training to ensure that they have adequate skills, knowledge and experience to satisfactorily provide the services.

Credit licensees are required to lodge with ASIC a compliance certificate (and pay the required fee) no later than 45 days after the licensee’s licensing anniversary in each year: section 53 National Credit Act.

ASIC has issued Information Sheet IS 135 Annual Compliance Certificates for Credit Licensees, a list of questions asked and information required and Information Sheet IS 138 Credit Annual Compliance Certificate: Statement of Personal Information Template.

The questions include: As at the annual compliance date, did the licensee have adequate arrangements and systems in place to ensure that it complied with the conditions of its licence?

The certificate concludes with a declaration that “to the best of its knowledge, the information supplied in this certificate is complete and accurate (it is an offence to provide false or misleading information to ASIC)”.

ASIC prefers that the certificate be completed online at the Australian Credit Register Portal where the annual compliance certificate becomes available on the licensee’s annual compliance date.

Langes can assist with advice on your compliance obligations and systems and review your compliance implementation.

ASIC has warned businesses and companies licensed by ASIC to not use the ASIC name or logo when promoting their businesses or the fact that they hold a licence with ASIC.

The warning follows a credit provider voluntarily agreeing to stop using ASIC’s name and logo on its website after ASIC found the use of the name and logo breached its intellectual property and was potentially misleading.

ASIC has reminded licensees that the correct way to inform the public that they hold a credit licence is to display the Australian credit licence number. Credit licensees must include their credit licence number in certain prescribed documents, including advertisements, from 1 April 2012.