09-239AD ASIC guidance assists industry to get ready for credit
Tuesday 1 December 2009
ASIC today released its first package of regulatory guidance to help entities and individuals prepare for the proposed National Consumer Credit regime.
The guidance has been released prior to the commencement of the legislation to ensure those likely to be impacted by the reforms can determine whether they will need to be registered or licensed, and to help them prepare their businesses in readiness for the new requirements when they come into effect.
ASIC has released:
Information Sheet 96 Getting ready for credit (INFO 96), which explains how the national credit regime applies and what people can do to start getting ready for credit;
Regulatory Guide 203 Do I need a credit licence? (RG 203), which is designed to help people who engage in credit activities understand whether they need to be licensed; and
Regulatory Guide 202 Credit registration and transition (RG 202), which outlines the process for registering with ASIC and the transition from registration to licensing.
A summary of the content of the guides follows at the end of this advisory.
ASIC Commissioner, Dr Peter Boxall, said many entities and individuals would be exposed to specific licensing requirements, and associated conduct, dispute resolution and training obligations for the first time. He said it was important for these people to prepare themselves at the earliest opportunity to ensure a smooth transition to the new regime.
Registration is the first step in the transition process. Persons who engage in credit activities can apply to ASIC to be registered from 1 April 2010 until 30 June 2010. Registered persons will then have six months to apply for an Australian Credit Licence, between 1 July 2010 and 31 December 2010.
‘ASIC encourages prospective licensees to review today's regulatory guidance as a package and confirm the extent to which the new regime impacts on their business. ASIC will be releasing further guidance in the coming weeks to assist licensees understand and comply with the new obligations, which will begin to take effect from 1 July 2010,’ Dr Boxall said.
Further information
ASIC will continue to publish information on its website about the new regulatory framework including the legislation, licensing process, general obligations and the timeframe in which the changes will take effect.
To receive information from ASIC about the National Consumer Credit Protection reforms, and be informed about relevant policy announcements or regulatory guidance, subscribe to the ASIC Credit Reform Update available at www.asic.gov.au/credit-update.
Where to start?
Step 1: Read Information Sheet 96 Getting ready for credit (INFO 96)
INFO 96 contains some general information to help alert people who are currently providing credit or credit services about when the new National Consumer Credit regime will start, and what they can do to start getting ready.
INFO 96:
suggests that people think about whether they will need to be registered and licensed under the new regime;
sets out some things people can start doing to make the process of registering with ASIC quicker and easier; and
provides a timeline that sets out the important dates for when new requirements start, and what needs to be done by those dates if persons are going to continue to provide credit or credit services.
Step 2: Read Regulatory Guide 203 Do I need a credit licence? (RG 203)
RG 203 will help anyone who engages in a credit activity determine whether they need to be licensed (and therefore register with ASIC).
RG 203 contains guidance to:
help people who engage in credit activities understand whether they need to be licensed;
explain some key concepts such as ‘credit’, ‘credit activity’, ‘credit provider’ and ‘credit assistance’; and
explains which people are exempt from the licensing requirements.
