Commonwealth Consolidated Acts Commonwealth Consolidated ActsGeneral conduct obligations
(1) A licensee must:
(a) do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly; and
(b) have in place adequate arrangements to ensure that clients of the licensee are not disadvantaged by any conflict of interest that may arise wholly or partly in relation to credit activities engaged in by the licensee or its representatives; and
(c) comply with the conditions on the licence; and
(d) comply with the credit legislation; and
(e) take reasonable steps to ensure that its representatives comply with the credit legislation; and
(ea) comply with the Reference Checking and Information Sharing Protocol; and
(f) maintain the competence to engage in the credit activities authorised by the licence; and
(g) ensure that its representatives are adequately trained, and are competent, to engage in the credit activities authorised by the licence; and
(h) have an internal dispute resolution procedure that:
(i) complies with standards and requirements made or approved by ASIC in accordance with the regulations; and
(ii) covers disputes in relation to the credit activities engaged in by the licensee or its representatives; and
(ha) give to ASIC the same information it would be required to give under subparagraph 912A(1)(g)(ii) of the Corporations Act 2001 if it were a financial services licensee; and
(i) be a member of the AFCA scheme; and
(j) have compensation arrangements in accordance with section 48; and
(k) have adequate arrangements and systems to ensure compliance with its obligations under this section, and a written plan that documents those arrangements and systems; and
(l) unless the licensee is a body regulated by APRA:
(i) have available adequate resources (including financial, technological and human resources) to engage in the credit activities authorised by the licence and to carry out supervisory arrangements; and
(ii) have adequate risk management systems; and
(m) comply with any other obligations that are prescribed by the regulations.
Assessment of whether compliance is adequate
(2) For the purposes of paragraphs (1)(b), (g), (k) and (l), in considering whether a matter is adequate, the nature, scale and complexity of the credit activities engaged in by the licensee must be taken into account.
Regulations in relation to internal dispute resolution procedures
(3) Regulations made for the purposes of paragraph (1)(h) may also deal with the variation or revocation of:
(a) standards or requirements made by ASIC; or
Reference Checking and Information Sharing Protocol
(3A) ASIC may, by legislative instrument, determine a protocol for sharing and requesting information about an individual in respect of whom there are reasonable grounds to suspect that:
(a) if the individual becomes a representative of a licensee ( recruiting credit licensee ), the individual will:
(i) provide credit assistance in relation to credit contracts secured by mortgages over residential property; and
(ii) be a mortgage broker or a director, employee or agent of a mortgage broker; or
(b) a mortgage intermediary ( prospective mortgage intermediary ) is acting, or will act, as an intermediary in relation to a licensee where the individual is, or is a former, current or prospective representative of, that licensee, and in that capacity the individual:
(i) provides, provided or will provide credit assistance in relation to credit contracts secured by mortgages over residential property; and
(ii) is, was or will be a mortgage broker or a director, employee or agent of a mortgage broker; or
(c) if the individual becomes a representative of a financial services licensee ( recruiting financial services licensee ), the individual will provide personal advice to retail clients about relevant financial products.
(3AA) The Reference Checking and Information Sharing Protocol may provide for any or all of the following to share information about the individual with the recruiting credit licensee, the prospective mortgage intermediary or the recruiting financial services licensee:
(a) if the individual is a licensee--the individual;
(b) if the individual is a former or current representative of a licensee--that licensee;
(c) if a mortgage intermediary has previously acted or is acting as an intermediary in relation to a licensee where the individual is, or is a former or current representative of, that licensee--that mortgage intermediary;
(3AB) The Reference Checking and Information Sharing Protocol may provide, in a case covered by paragraph (3A)(a) or (b), for the recruiting credit licensee or the prospective mortgage intermediary to request information about the individual from any or all of the following:
(a) if the individual is a licensee or a financial services licensee--the individual;
(b) if the individual is a former or current representative of a licensee--that licensee;
(c) if the individual is a former or current representative of a financial services licensee--that financial services licensee;
(d) if a mortgage intermediary has previously acted or is acting as an intermediary in relation to a licensee where the individual is, or is a former or current representative of, that licensee --that mortgage intermediary.
(3AC) The Reference Checking and Information Sharing Protocol may provide for keeping and retaining records of information shared, and the circumstances under which that information is shared.
(3B) The Reference Checking and Information Sharing Protocol must not:
(a) require or permit personal information (within the meaning of the Privacy Act 1988 ) to be shared, other than with the consent of the individual to whom the information relates; or
(b) require information to be shared in relation to conduct that occurred more than 5 years before the information is shared.
(3E) Expressions used in paragraphs (3A)(c) and (3AB)(c) that are also used in the Corporations Act 2001 (other than Reference Checking and Information Sharing Protocol) have the same meaning in that subsection as they have in that Act.
(3F) A person has qualified privilege in relation to information shared in accordance with the Reference Checking and Information Sharing Protocol.
(3G) A person who has qualified privilege under subsection (3F) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.
Civil penalty for non - compliance
(4) The licensee must not contravene paragraph (1)(a), (b), (e), (ea), (f), (g), (h), (i), (j), (k), (l) or (m).
Civil penalty: 5,000 penalty units.
Note: Contravening paragraphs (1)(c) (obligation to comply with conditions on the licence) and (d) (compliance with the credit legislation) has consequences under other provisions.