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10-134AD ASIC releases further updated guidance to assist credit licensees

Friday 25 June 2010


ASIC today released further updated versions of regulatory guides, which were first issued in December 2009 as part of ASIC’s package of guidance to prospective credit licensees on the implementation of the National Consumer Credit Protection Act 2009 (National Credit Act).

ASIC has updated and re-released the following regulatory guides:
ASIC has also re-released Pro Forma 224 Australian credit licence conditions (PF 224), which updates information first released on 8 June of this year.

The changes made to the regulatory guides do not represent substantive changes to ASIC’s current policies and approach to administering the new National Consumer Credit regime. Rather, the new versions incorporate references to regulations made in recent months.

Importantly, the guides refer to particular regulations affecting lenders with carried over (COI) instruments that is, a contract that was (a) made, and was in force immediately before 1 July 2010; and (b) subject to the old Credit Code (the Uniform Consumer Credit Code). Further details are provided in the background to this advisory.

Today’s updates follow on from the amended regulatory guides released on 8 June 2010, Regulatory Guide 203 Do I need a credit licence? (RG 203) and Regulatory Guide 204 Credit licensing: Applying for and varying a credit licence (RG 204).

A summary of the main amendments made to these regulatory guides and PF 224 is set out in the background to this advisory. ASIC will continue to monitor the implementation of the new National Consumer Credit Regime, including feedback from industry participants, and will consider any further guidance which may assist industry with the implementation process..

Background

Since these regulatory guides were published in December 2009, the following credit regulations have been made, to which the updated guides refer, where relevant:

10 March 2010
24 March 2010
20 May 2010
15 June 2010
All guides have subsequently been amended to refer correctly to the latest regulations. A summary of the other amendments made to the updated regulatory guides follows:

Regulatory Guide 202 Credit registration and transition (RG 202)
RG 202 is for people who currently engage in credit activities and want to continue to do so after 1 July 2010. RG 202 explains how to make an application for registration. It also gives some guidance on the obligations of registered persons, and the transition from registration to holding an Australian credit licence

RG 202 has been amended to note the options available to ‘COI lenders’, that is, lenders with COIs who will not be doing any new lending on or after 1 July 2010.

Registration closes on 30 June 2010.

Regulatory Guide 205 Credit Licensing: General conduct obligations (RG 205)
RG 205 provides guidance for credit licence applicants and credit licensees about ASIC’s expectations for meeting the general conduct obligations in s47(1) of the National Credit Act.

RG 205 now includes discussion about the regime for regulating COIs. As unlicensed COI lenders will be required to meet conduct standards broadly similar to those imposed on credit licensees, the guidance on meeting these obligations in RG 205 will generally also apply to unlicensed COI lenders.

Regulatory Guide 206 Credit Licensing: Competence and training (RG 206)
RG 206 provides guidance on how credit licensees and licence applicants can meet the specific organisational competence and representative training requirements in s47(1)(f) and s 47(1)(g) of the National Credit Act.

RG 206 now refers to the regime for regulating COIs. As unlicensed COI lenders will be required to meet standards for organisational competence and representative training broadly similar to those imposed on credit licensees, the guidance on meeting these obligations in RG 206 will generally also apply to unlicensed COI lenders.

Regulatory Guide 207 Credit Licensing: Financial requirements (RG 207)
RG 207 provides guidance on how credit licensees and licence applicants can meet the obligation in s47(1)(l) to have adequate financial resources to conduct their business in compliance with the National Credit Act.

RG 207 now refers to the regime for regulating COIs. As unlicensed COI lenders will be required to meet standards for available financial resources similar to those imposed on credit licensees, the guidance on meeting these obligations in RG 207 will generally also apply to unlicensed COI lenders.

Regulatory Guide 208 How ASIC charges fees for credit relief applications (RG 208)
RG 208 provides credit licensees with guidance on how fees for relief applications are charged and describes the principles ASIC uses to calculate fees.

Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209)
RG 209 sets out ASIC's expectations for meeting the responsible lending obligations.

RG 209 has been amended to refer to recent regulations that extend the amount of time available to assignees of credit contracts to provide the original assessment of whether the credit is 'not unsuitable' when requested by the borrower.

Pro Forma 224 Australian credit licence conditions (PF 224)
PF 224 has been amended to align the standard licence conditions with the experience, training and continuing professional development requirements for responsible managers of mortgage brokers set out in RG 206 and the minimum requirements for adequate professional indemnity insurance in Regulatory Guide 210 Compensation and insurance arrangements for credit licensees.

Further information
To receive information from ASIC about the National Consumer Credit Protection reforms, including relevant policy announcements, new regulatory guidance and updates to existing regulatory guidance, subscribe to the ASIC Credit Reform Update.

ASIC will continue to publish information on its website www.asic.gov.au/credit about the new regulatory framework including the legislation, licensing process, general obligations and the timeframe in which the changes will take effect.






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