finPOWER Newsletter 26 May 2010

National Credit Licensing Roadshow and webcast for industry

ASIC will be hosting a new round of roadshows and a national webcast to help registered persons and prospective licensees prepare for the licensing process and better understand the new obligations associated with the National Credit Act, which takes effect from 1 July 2010.

The roadshow presentations, which will be held in Sydney, Melbourne and Perth, provide an opportunity for industry to hear how they can best prepare for the licensing process and explain the necessary steps that need to be taken to lodge an application for an Australian Credit Licence (ACL), between 1 July and 31 December 2010. It will also explain key obligations that take effect from July 2010 and the ongoing obligations once becoming an ACL holder.

A webcast of a roadshow presentation will be streamed live on Tuesday, 15 June 2010 at 1.00pm AEST. The webcast will provide people with an interactive opportunity to see and hear a roadshow presentation as it is presented live, and participate in question time.

Access to the Information Pack and other materials will be available to download via the webcast website. ASIC's Senior Executives, presenting the roadshow, will answer questions and webcast participants will be able to submit questions via the webcast website. In addition to the Melbourne, Sydney and Perth roadshow presentations, ASIC will also host an “open house” session in all capital cities. These open house sessions will provide a face-to-face opportunity to talk to an ASIC representative about any credit licensing questions you may still have following the webcast presentation.

For a full list of the dates, locations and venues for each session, click here

It is necessary to RSVP

RSVP registrations will open on Monday 24 May 2010.

To view the webcast, people must register to ensure their IT system is suitable. Register now.

To secure a seat at a presentation or to visit one our open house presentations, click here and select the session you wish to attend.

If you have any questions, you can contact ASIC on 1300 300 630 or email infoline@asic.gov.au.

Registration Update

Information for lenders with pre-existing contracts who do not intend to continue lending after 30 June 2010

Since registration opened for all those entities and individuals intending to engage in credit activities after 1 July 2010, ASIC has received over 8700 registrations (as at 19 May 2010).

We have been pleased with the response and are now preparing for the next phase of the implementation of the National Consumer Credit Protection Act 2009 (National Credit Act), that is, the licensing phase.

We urge anyone who is yet to register that they must do so before 30 June 2010, and ideally, by 18 June 2010, to ensure they can continue offering credit activities after 1 July 2010.

If you wait until after 18 June 2010 to apply, there is a risk that we won’t be able to make a decision on your application by the end of the registration period.

We will not accept registration applications after 30 June 2010. If you are not registered with ASIC by 30 June 2010 or acting as the authorised credit representative of someone who is registered, you must stop engaging in credit activities until you either become registered or have an Australian credit licence.

For those that are yet to register, more information is available from the ASIC Credit website.

Registered persons’, and prospective licensees who are yet to register, are reminded that they must apply for a credit licence between 1 July 2010 and 31 December 2010, or become a representative of a registered person or a credit licensee if they wish to continue engaging in credit activities beyond 31 December 2010.

For lenders with pre-existing contracts who do not intend entering into new contracts after 30 June 2010, visit the ASIC website for more information about how the law applies to you and what action you need to take.

New dispute resolution requirements

On 7 May 2010, ASIC issued some regulatory guidance in relation to the new dispute resolution requirements for credit that will apply to registered persons, credit licensees, credit representatives and margin lending financial service providers.

The updated regulatory guidance is set out in:

• Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165); and
• Regulatory Guide 139 Approval and oversight of external dispute resolution schemes (RG 139)

The regulatory guidance is intended to facilitate the resolution of consumer complaints in relation to credit including, where necessary, through access to external dispute resolution services.

The key elements and implications of the regulatory guidance for industry participants are outlined in ASIC Advisory 10-95AD Access to dispute resolution for consumers of credit and margin lending financial services

Regulations supporting margin loan regulatory regime

Also on 7 May 2010, the Minister for Financial Services, Superannuation, and Corporate Law, Chris Bowen MP, announced that the prescribing regulations relating to the new margin lending regime had been made (Corporations Amendment Regulations 2010 (no. 4)). The new regulations:

• cover detailed matters that must be taken into account when lenders assess whether the loan is not unsuitable for the client under the new responsible lending requirements;
• ensure that a margin lending facility is a financial product for the purposes of the ASIC Act so that the general consumer protection measures that apply to other financial products under the ASIC Act extend to margin loans; and
• allow certain disclosure documents to be combined where a person is providing both financial services and credit products (see below for further information).

The regulations will come into effect at the same time as the general margin loan provisions in the Corporations Act on 1 January 2011.

More information is available in the Minister’s announcement.

More information about the new requirements in relation to margin lending is available from the ASIC Credit website.

Combining financial services guides and credit guides

In an important development for businesses intending to provide both credit services under a credit licence and financial services under an AFS licence, the regulations allow the combining of credit guides and financial services guides. This means that dual licensees will be able to provide their customers with a single document where they would otherwise have to provide two documents.