ACL Personnel Requirements

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Credit licensees must reasonable steps to ensure their representatives comply with the credit legislation and where they engage in credit activities, ensure they are trained and competent to do so.

Monitoring and supervision

You must monitor and supervise any person who acts on your behalf.

To what extent you will need to monitor your representatives will depend on the function they perform and the nature, scale and complexity of your business.

Your measures should:

  • enable you to determine who your representatives are, the role they perform and if they are appropriately authorised
  • ensure your representatives are complying with both their scope of authorisation, your licence conditions and the credit legislation
  • demonstrate that your representatives understand your compliance measures
  • monitor this on an ongoing basis
  • include methods to remedy any breaches

Employment screening

Appropriate background checks should be made before you appoint any new representative. This should include referee reports, searching ASIC’s register of banned and disqualified persons and a police check.

Knowledge and skills / organisation competence

You must maintain your organisation’s competency to engage in the credit activities that you are authorised to engage in. This is referred to as the ‘organisational competence’ obligation.

Responsible managers

The qualifications and experience of the people who manage your credit business, known as the ‘responsible managers’,  will be assessed to determine if you comply with this obligation, otherwise known as the ‘fit and proper’ test. 

Responsible managers must at a minimum have:

  • at least two years relevant problem-free experience; and
  • credit industry qualifications to at least Certificate IV level; or
  • another general relevant higher level qualification (e.g. diploma or university degree in a financial discipline)

If you are a mortgage broker, your responsible managers qualification should be at least a Certificate IV in Financial Services (Finance/Mortgage Broking).

They must also undertake a minimum of 20 hours of CPD per year.

Your organisation competence must be reviewed regularly and if your responsible managers or business activities change.

Credit representatives

Credit licensees must ensure that their representatives are adequately trained and competent to engage in the credit activities authorised by their licence, referred to as the ‘representative training’ obligation.

ASIC have not set minimum training standards for credit representatives.  It is up to the credit licensee to determine:

  • what initial and ongoing training is appropriate to ensure compliance
  • make this a part of the recruitment and training systems

If industry training standards currently exist for specific sectors of the credit industry or for specific products, ASIC expect that you representatives will be trained to at least this level.

While ASIC consider 20 hours of CPD per year to be appropriate, no minimum level is mandated.  Should the credit licensee determine that for example, less than 10 hours of CPD per year is appropriate, ASIC expects that the licensee will explain why this is sufficient.

Mortgage Brokers

Representatives who provide mortgage broking services must met minimum training requirements as set out by ASIC, which are:

  • at least a Certificate IV in Financial Services (Finance/Mortgage Broking)
  • 20 hours of CPD per year.

Transitional arrangements

Credit licensees must fully comply with the organisational competence and representative training obligations by 30 June 2014, until this time ASIC will also accept:

  • Responsible managers for lenders who can demonstrate five years relevant problem-free experience
  • Responsible managers of businesses providing credit assistance who can demonstrate two years relevant problem-free experience
  • Responsible managers of a mortgage broking business can rely on mentoring to meet the requirement of two-years problem-free experience (Mortgage and Finance Association of Australian arrangement - provided will be completed by 30 June 2012)

Key ASIC references:

Regulatory Guide 205: Credit licensing: General conduct obligations Section E
Regulatory Guide 206 Credit licensing: Competence and Training
Checking in the Financial Services Industry

 

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