Banking Services Alert

A CHRISTMAS PRESENT FROM ASIC

 

One does not expect to receive Christmas presents from ASIC.  But this year ASIC has given a special Christmas present to the credit industry - a raft of regulatory guides and guidance notes for credit licensees under the new National Consumer Credit Protection legislation.

 

These guidelines were issued on Friday 18 December 2009 and the new guidance notes deal with how to apply for a credit licence.  Licence applications will be made between 1 July 2010 and 31 December 2010.

 

Some of these guidance notes have previously been issued in draft form and were subject to an extensive consultation process.  These guidance notes are now in final form and comprise:

· Regulatory Guide 204 Credit licensing: Applying for and varying a credit licence

· Regulatory Guide 205 Credit licensing: General conduct obligations

· Regulatory Guide 206 Credit licensing: Competence and training

· Regulatory Guide 207 Credit licensing: Financial requirements

· Regulatory Guide 208 How ASIC charge fees for credit relief applications

 

An important consideration for small operators is how small credit businesses will be able to comply with the regulatory guides which apply to the credit industry generally.  Importantly, ASIC has also released:

 

INFO 97 Guidance for small credit businesses

 

As part of the credit licensing process it may be necessary to apply for relief from the strict application of certain parts of the law and/or seek comfort from ASIC that it will not take enforcement action against a credit licensee in particular circumstances.

 

In this regard two of the existing guides under FSR have been updated to accommodate credit licensees, namely:

 

· Regulatory Guide 51 Applications for relief

· Regulatory Guide 108 No action letters

 

It is not our intention to summarise these guides prior to Christmas, but we will be doing so after Christmas in a series of email alerts.

 

In the meantime, we must all thank ASIC for the light summer reading it has given us to enjoy with the sun and surf.

 

Merry Christmas to all.

 

Written by Richard Williams - Partner, Banking Services

 

To view ASIC’s guidelines select this link.#