Fit and proper people

 

Before we can grant you a credit licence, we must be satisfied that you are a fit and proper person to engage in the credit activities that will be covered by that licence.

What is meant by ‘fit and proper’?

You must be a fit and proper person to engage in credit activities. In determining whether you meet this requirement, we will have regard to whether each of the people involved in managing your credit business are fit and proper people to perform that role.

To be a fit and proper person to engage in credit activities means that the person:

  • is competent to operate a credit business (as demonstrated by the person’s knowledge, skills and experience);

  • has the attributes of good character, diligence, honesty, integrity and judgement;

  • is not disqualified by law from performing their role in your credit business; and

  • either has no conflict of interest in performing their role in your credit business, or any conflict that exists will not create a material risk that the person will fail to properly perform their role in your credit business.

Note: These criteria for determining whether a person is a fit and proper person are consistent with the criteria set out for responsible persons of ADIs in Prudential Standard APS 520 Fit and Proper.

To demonstrate that you have these attributes, you will need to:

  • identify the people involved in the management of your business (your ‘fit and proper people’);

  • specify which of those people you will rely on to demonstrate that you are competent to engage in credit activities (your ‘responsible managers’); and

  • provide us with information about each of those people, their role in your credit business and their past conduct, and, if they will be responsible managers, their knowledge and experience.

Standard applicants will be required to provide some additional documents about each of their ‘fit and proper people’ to support the application. More information on these documents is set out in Section E of RG 204.

For streamlined applicants, we will not take this information into account when we assess your application, except to check whether:

  • a banning order or disqualification order under Pts 2-4 of the National Credit Act is in force against the applicant; or

  • an order under the relevant State Criminal Organisations Acts is in force against the applicant or a director, secretary or senior manager of the applicant who would perform duties in relation to the credit activities to be authorised by the licence.

When we consider whether you are a fit and proper person, we are also required to take into account whether you, or any of your ‘fit and proper people’, have been the subject of specified regulatory outcomes: see s37(2) of the National Credit Act. You will be required to make a statement about whether you or any of your ‘fit and proper people’ have been the subject of these regulatory outcomes: see Section F of RG 204.

If you or one or more of the people involved in your credit business have been subject to one of these outcomes, this will not necessarily be grounds for refusing your application for a credit licence. However, we will need to consider the matter to decide the effect it may have on whether you are a fit and proper person to engage in credit activities. For example, if a responsible manager has been convicted of serious fraud, the circumstances of the offence may show such a disregard for the interests of other people, or so great an abuse of their confidence or trust, that we will conclude that the person’s involvement in your business means that you are not a fit and proper person to engage in credit activities.

If you or one or more of the people involved in your credit business have been subject to one of these outcomes, you will be asked to provide an explanation of the matter to help us make this decision.

Who are my ‘fit and proper people’?

Your ‘fit and proper people’ are:

  • if you are a company or other body corporate—your directors and secretaries, and any senior managers who will perform duties in relation to credit;

  • if you are a partnership or a multiple trustee:

    • the partners or trustees who will perform duties in relation to credit; and

    • if a partner or trustee is a body corporate—the directors and company secretaries of the partner or trustee; or

  • if you are a natural person—you.

ASIC does not maintain details of your fit and proper people on our public register of credit licensees. In general, if you are granted a licence you will only be required to notify us of changes to your fit and proper people on an annual basis, when you lodge your Annual Compliance Certificate. However, if you apply to vary your licence, you may need to update the details of your fit and proper people in the variation application.

Details of ‘fit and proper people’

The way the list of people is presented when you first enter this part of your online application will depend on whether ASIC already holds information about your fit and proper people.

If you are a company, the credit licensing system will access the Australian Company Register to pre-fill this information.

Company applicants

When you first enter this part of the application you will see a screen (the main screen) that lists:

  • the name and date and place of birth details of each officeholder; and

  • the ‘status’ of each person (which shows whether you have completed all of the information required to be included in the application for this person).

For company applicants, the pre-filled information about each listed person has been accessed from the Australian Company Register. If the pre-filled information is not correct, you will need to update that register by lodging a Form 484 before you can complete your online application. You should allow 24 hours from the time the Form 484 is processed for changes to be reflected in your online application.

ASIC does not have details of your senior managers, so these people are not pre-filled in your online application. You will need to click on ‘Add a senior manager’ and enter the requested information for that person on the displayed page. You will need to do this for each senior manager who will perform duties in relation to credit.

You will need to decide who your senior managers are. A ‘senior manager’ is a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of your business, or who has the capacity to significantly affect your financial standing. Senior managers are likely to be involved in setting the policies and procedures to be followed by your representatives who have direct contact with consumers. They are also likely to be responsible for ensuring that your representatives comply with the law.

When you first enter this part of the application, or add a person to the list, the ‘Status’ column will show as ‘Not complete’ for each of the people who are listed. You will need to click on the ‘Edit’ button, which will display a new screen that asks for the following information about this person:

  • a description of the person’s role in your business (you can select one of the listed roles);

  • the person’s job title;

  • a description of the industry category or categories that best describes the person’s area of experience (you can select more than one of the listed categories); and

  • whether you rely on the person to demonstrate that you are competent to engage in credit activities (i.e. whether they are a responsible manager).

If you indicate that the person is a responsible manager, you will be asked to provide information about the person’s qualifications and experience later in the application.

When you have entered this information, click ‘Next’ and you will be returned to the main screen.

You will need to repeat this for each person who is listed.

When you have completed the required information for all of your listed people, click ‘Next’ and you will continue with your application.

Body corporate applicants (other than companies)

When you first enter this part of the application you will see a screen (the main screen) that lists:

  • the name and date and place of birth details of each officeholder; and

  • the ‘status’ of each person (which shows whether you have completed all of the information required to be included in the application for this person).

No people will be listed when you first enter the main screen. You will have to add all of your ‘fit and proper people’ by clicking on ‘Add a director, secretary or senior manager’.

You will need to decide who your senior managers are. A ‘senior manager’ is a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of your business, or who has the capacity to significantly affect your financial standing. Senior managers are likely to be involved in setting the policies and procedures to be followed by your representatives who have direct contact with consumers. They are also likely to be responsible for ensuring that your representatives comply with the law.

When you add a person to the list, the ‘Status’ column will show as ‘Not complete’ for this person.

You will need to click on the ‘Edit’ button, which will display a new screen that asks for the following information about this person:

  • a description of the person’s role in your business (you can select one of the listed roles);

  • the person’s job title;

  • a description of the industry category or categories that best describes the person’s area of experience (you can select more than one of the listed categories); and

  • whether you rely on the person to demonstrate that you are competent to engage in credit activities (i.e. whether they are a responsible manager).

If you indicate that the person is a responsible manager, you will be asked to provide information about the person’s qualifications and experience later in the application.

When you have entered this information, click ‘Next’ and you will be returned to the main screen.

You will need to repeat this for each person who is listed.

When you have completed the required information for all of your listed people, click ‘Next’ and you will continue with your application.

Partnership and multiple trustee applicants

When you first enter this part of the online application you will see a screen (the main screen) that lists:

  • the name and date and place of birth details of each partner or trustee;

  • if any partner or trustee is a body corporate:

    • the name and ACN of the body corporate; and

    • the name and date and place of birth details of each officeholder of the body corporate; and

  • the ‘status’ of the listed people (which shows whether you have completed all of the information required to be included in the application for this person).

The main screen first lists each partner or trustee who is a natural person. It then lists each body corporate partner or trustee, and the directors and secretaries of that body corporate.

No people will be listed when you first enter the main screen. You will have to add all of your ‘fit and proper people’.

You can add a partner or trustee that is a natural person or a body corporate. You will need to click on the appropriate ‘Add’ link, and enter the requested information for that person or body corporate on the displayed page. You will need to do this for each partner or trustee who will perform duties in relation to credit.

If you add a body corporate partner or trustee, you will only need to enter its ABN, ACN or ARBN. The credit licensing system will access the Australian Company Register to pre-fill the details of officeholders. If the pre-filled information is not correct, that register must be updated by lodging a Form 484 before you can complete your online application. You should allow 24 hours from the time the Form 484 is processed for changes to be reflected in your online application.

If you click on ‘Remove’ for any of the body corporate partners or trustees, each officeholder of that body corporate will also be removed.

The ‘Status’ column will initially show as ‘Not complete’ for each person. You will need to click on the ‘Edit’ button, and this will display a new screen that asks for the following information about this person:

  • a description of the person’s role in your business (you can select one of the listed roles);

  • the person’s job title;

  • a description of the industry category or categories that best describes the person’s area of experience (you can select more than one of the listed categories); and

  • whether you rely on the person to demonstrate that you are competent to engage in credit activities (i.e. whether they are a responsible manager).

If you indicate that the person is a responsible manager, you will be asked to provide information about the person’s qualifications and experience later in the application.

When you have entered this information, click ‘Next’ and you will be returned to the main screen.

You will need to repeat this for each person who is listed.

When you have completed all of your people, click ‘Next’. You will be asked to enter the names of all other partners or trustees that have not been listed on the main screen. You should include in this section the names of any partners or trustees who will not be involved in your credit business (and so are not your ‘fit and proper people’).

When you have entered this information, click ‘Next’ and you will continue to the next part of the application.

Natural person applicants

When you first enter this part of the online application, you will see a screen that contains your name and date and place of birth details.

The ‘Status’ column will show as ‘Not complete’. You will need to click on the ‘Edit’ button, and this will display a new screen that asks for the following information:

  • a description of your role in your business (you should select ‘individual applicant or partner’);

  • your job title;

  • a description of the industry category or categories that best describes your area of experience (you can select more than one of the listed categories); and

  • whether you will be a responsible manager (you should select ‘yes’).

When you have entered this information, click ‘Next’ and you will continue with your application.

Responsible managers

You must identify at least one person as a responsible manager. We will assess the knowledge and skills of your responsible managers to determine whether you are competent to engage in the credit activities for which you have applied.

Note: For further information on the role of responsible managers and how we will assess your organisational competence by looking at the knowledge and skills of your responsible managers, see RG 206.

Key person licence condition 

If we consider that you are heavily dependent on the expertise of a small number of people to be competent to engage in credit activities, we are likely to include a condition on your credit licence (if it is granted) that specifies that these people are ‘key people’ to your business.

If we put this condition on your credit licence, you will have to:

  • notify us if any of your key people leave, or are about to leave, your business; and
  • nominate another suitably qualified person to take over from them.

You cannot change your key people unless you have varied your credit licence. For more information on applying to vary your credit licence, see Section H of RG 204.

 

 


This information comes from Regulatory Guide 204.

Last updated: 20/10/2014 12:00