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National Consumer Credit Protection Act 2009

Authoritative Version
Act No. 134 of 2009 as amended, taking into account amendments up to Financial Sector Reform (Hayne Royal Commission Response) Act 2020
An Act relating to credit, and for related purposes
Administered by: Treasury
Registered 17 Feb 2021
Start Date 01 Jan 2021

Commonwealth Coat of Arms of Australia

National Consumer Credit Protection Act 2009

No. 134, 2009

Compilation No. 25

Compilation date:                              1 January 2021

Includes amendments up to:            Act No. 154, 2020

Registered:                                         17 February 2021

This compilation is in 2 volumes

Volume 1:       sections 1–322

Volume 2:       sections 323–337

                        Schedule 1

                        Endnotes

Each volume has its own contents

This compilation includes commenced amendments made by Act No. 135, 2020

About this compilation

This compilation

This is a compilation of the National Consumer Credit Protection Act 2009 that shows the text of the law as amended and in force on 1 January 2021 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

  

  

  


Contents

Chapter 1—Introduction                                                                                       1

Part 1‑1—Introduction                                                                                                       1

1............................ Short title............................................................................ 1

2............................ Commencement.................................................................. 1

3............................ The National Credit Code................................................... 2

Part 1‑2—Definitions                                                                                                           3

Division 1—Introduction                                                                                            3

4............................ Guide to this Part................................................................ 3

Division 2—The Dictionary                                                                                       4

5............................ The Dictionary.................................................................... 4

Division 3—Definitions relating to the meaning of credit activity     20

6............................ Meaning of credit activity................................................. 20

7............................ Meaning of credit service................................................. 21

8............................ Meaning of credit assistance............................................ 21

9............................ Meaning of acts as an intermediary................................. 22

10.......................... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee               23

Division 4—Other definitions                                                                                 24

12.......................... When a business is carried on in this jurisdiction............ 24

13.......................... Meaning of misleading..................................................... 24

14.......................... Meaning of person—generally includes a partnership...... 24

15.......................... Meaning of person—generally includes multiple trustees 25

15A....................... Meaning of associate........................................................ 27

15B........................ Meaning of mortgage broker........................................... 27

15C........................ Meaning of mortgage intermediary.................................. 28

16.......................... Qualified privilege............................................................ 28

16A....................... Meaning of control........................................................... 29

Part 1‑3—Application of this Act and the Transitional Act                      31

Division 1—Introduction                                                                                          31

17.......................... Guide to this Part.............................................................. 31

Division 2—Constitutional basis and application of this Act and the Transitional Act 32

18.......................... Constitutional basis for this Act and the Transitional Act. 32

19.......................... Meaning of referring State............................................... 33

20.......................... Meaning of referred credit matter.................................... 37

21.......................... General application of this Act and the Transitional Act... 37

22.......................... When Acts bind Crown.................................................... 39

Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws                                                                                                                      40

23.......................... Concurrent operation intended.......................................... 40

24.......................... When Commonwealth credit legislation does not apply.... 40

25.......................... Avoiding direct inconsistency between Commonwealth and State and Territory laws             41

26.......................... Regulations to deal with interaction between laws............ 43

Chapter 2—Licensing of persons who engage in credit activities   45

Part 2‑1—Requirement to be licensed to engage in credit activities      45

Division 1—Introduction                                                                                          45

27.......................... Guide to this Part.............................................................. 45

Division 2—Engaging in credit activities without a licence                   46

28.......................... Application of this Division.............................................. 46

29.......................... Prohibition on engaging in credit activities without a licence 46

Division 3—Other prohibitions relating to the requirement to be licensed         48

30.......................... Prohibitions on holding out and advertising etc................ 48

31.......................... Prohibition on conducting business with unlicensed persons  49

32.......................... Prohibition on charging a fee etc....................................... 49

Part 2‑2—Australian credit licences                                                                         51

Division 1—Introduction                                                                                          51

34.......................... Guide to this Part.............................................................. 51

Division 2—Australian credit licences                                                               52

35.......................... Australian credit licences.................................................. 52

Division 3—How to get an Australian credit licence                                 53

36.......................... Applying for a licence....................................................... 53

37.......................... When a licence may be granted—applicants other than ADIs  53

37A....................... Fit and proper person test................................................. 55

37B........................ Fit and proper person test—matters to which ASIC must have regard    56

38.......................... When a licence may be granted—ADIs............................ 57

39.......................... Regulations may prescribe streamlined process for other applicants        58

40.......................... Licences must not be granted to certain applicants............ 58

41.......................... Applicant must be given hearing before refusal of licence 59

42.......................... Notice of grant or refusal of licence and date of effect...... 59

43.......................... Australian credit licence numbers..................................... 59

44.......................... Basis on which licence is granted..................................... 60

Division 4—Conditions on an Australian credit licence                           61

45.......................... The conditions on the licence............................................ 61

46.......................... Licence conditions—special procedures for APRA‑regulated bodies      62

46A....................... ASIC may request information etc. in relation to an application for conditions to be varied    63

Division 5—Obligations of licensees                                                                   66

47.......................... General conduct obligations of licensees.......................... 66

48.......................... Requirements for compensation arrangements.................. 68

49.......................... Obligation to provide a statement or obtain an audit report if directed by ASIC      68

50.......................... Obligation to give ASIC information required by the regulations            70

51.......................... Obligation to provide ASIC with assistance if reasonably requested       71

52.......................... Obligation to cite Australian credit licence number........... 72

53.......................... Obligation to lodge annual compliance certificate............. 73

53A....................... Obligation to notify ASIC of change in control................ 74

53B........................ Obligation to notify ASIC if licensee does not engage in credit activities                75

Division 6—When a licence can be suspended, cancelled or varied  76

Subdivision A—Suspensions and cancellations                                                76

54.......................... Suspension or cancellation without hearing...................... 76

55.......................... Suspension or cancellation after offering a hearing........... 77

56.......................... Suspension and cancellation—special procedures for APRA‑regulated bodies       78

Subdivision B—Variations                                                                                    79

57.......................... Varying licences............................................................... 79

Subdivision C—Miscellaneous rules about suspensions, cancellations and variations                80

58.......................... Effect of suspension......................................................... 80

59.......................... Revocation of suspension................................................. 80

60.......................... Date of effect, notice and publication of variation, cancellation or suspension etc.   80

61.......................... Statement of reasons......................................................... 80

62.......................... ASIC may allow licence to continue in force.................... 80

Part 2‑3—Credit representatives and other representatives of licensees 82

Division 1—Introduction                                                                                          82

63.......................... Guide to this Part.............................................................. 82

Division 2—Authorisation of credit representatives                                 83

64.......................... Licensee may authorise credit representatives................... 83

65.......................... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives.......................................................................................... 84

66.......................... Credit representative of 2 or more licensees...................... 85

67.......................... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence.......................................................................................... 86

68.......................... Variation and revocation of authorisations and sub‑authorisations          86

69.......................... Obligation not to give authorisation that has no effect...... 87

70.......................... Obligation to vary or revoke authorisation that ceases to have effect       87

71.......................... Obligation to notify ASIC etc. about credit representatives 88

72.......................... Credit representative numbers........................................... 90

Division 3—Information about representatives                                           91

73.......................... ASIC may give licensee information about representatives 91

Division 4—Liability of licensees for representatives                               94

74.......................... Application of this Division.............................................. 94

75.......................... Responsibility if representative of only one licensee......... 94

76.......................... Representatives of multiple licensees................................ 94

77.......................... Responsibility extends to loss or damage suffered by client 95

78.......................... Effect of this Division....................................................... 95

Part 2‑4—Banning or disqualification of persons from engaging in credit activities       97

Division 1—Introduction                                                                                          97

79.......................... Guide to this Part.............................................................. 97

Division 2—Banning orders                                                                                    98

80.......................... ASIC’s power to make a banning order........................... 98

81.......................... What a banning order prohibits....................................... 100

82.......................... Effect of banning orders................................................. 101

83.......................... Variation or cancellation of banning orders.................... 102

84.......................... Date of effect, notice and publication of banning order, variation or cancellation     103

85.......................... Statement of reasons....................................................... 103

Division 3—Disqualification by the court                                                      104

86.......................... Disqualification by the court........................................... 104

Part 2‑5—Financial records, trust accounts and audit reports              105

Division 1—Introduction                                                                                        105

87.......................... Guide to this Part............................................................ 105

Division 2—Financial records of licensees                                                    106

88.......................... Obligation to keep financial records................................ 106

89.......................... How financial records are to be kept............................... 107

90.......................... Language of financial records......................................... 107

91.......................... Location of financial records........................................... 107

92.......................... Information to be shown in financial records.................. 108

93.......................... Regulations may impose additional requirements........... 109

94.......................... Financial records taken to be made with licensee’s authority 109

95.......................... Obligation to retain financial records for 7 years............ 109

96.......................... Financial records are prima facie evidence of matters..... 110

Division 3—Trust accounts of credit service licensees                           111

97.......................... Application of this Division............................................ 111

98.......................... Obligation for credit service licensees to maintain trust account               111

99.......................... Obligations in relation to trust account money................ 112

100........................ Obligation to lodge trust account statement and trust account audit report               113

101........................ Time of lodgment of trust account statement and trust account audit report             114

Division 4—Matters relating to audit reports                                             116

102........................ Auditor’s right of access to records, information etc...... 116

103........................ Auditor’s fees and expenses........................................... 117

104........................ Auditor to report on certain matters................................ 117

105........................ Qualified privilege for auditor etc................................... 118

106........................ Regulations in relation to audit reports etc...................... 119

Part 2‑6—Exemptions and modifications relating to this Chapter      120

Division 1—Introduction                                                                                        120

107........................ Guide to this Part............................................................ 120

Division 2—Exemptions and modifications relating to this Chapter 121

108........................ Provisions to which this Part applies.............................. 121

109........................ Exemptions and modifications by ASIC......................... 121

110........................ Exemptions and modifications by the regulations........... 123

Chapter 3—Responsible lending conduct                                        124

Part 3‑1—Licensees that provide credit assistance in relation to credit contracts              124

Division 1—Introduction                                                                                        124

111........................ Guide to this Part............................................................ 124

112........................ Application of this Part................................................... 125

Division 2—Credit guide of credit assistance providers                        126

113........................ Credit guide of credit assistance providers...................... 126

Division 3—Quote for providing credit assistance etc. in relation to credit contracts 129

114........................ Quote for providing credit assistance etc........................ 129

Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts                                                                                                132

115........................ Obligations of credit assistance providers before providing credit assistance for credit contracts            132

116........................ Preliminary assessment of unsuitability of the credit contract  133

117........................ Reasonable inquiries etc. about the consumer................. 133

118........................ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit........................................................................................ 134

119........................ When the credit contract must be assessed as unsuitable—remaining in credit contract           136

120........................ Providing the consumer with the preliminary assessment 138

Division 5—Fees, indirect remuneration etc. relating to credit contracts           140

121........................ Fees, indirect remuneration etc. relating to credit contracts 140

122........................ No profiting from fees etc. paid to third parties.............. 141

Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts   143

123........................ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts.......................................................................... 143

124........................ Prohibition on suggesting to consumers to remain in unsuitable credit contracts     145

Division 7—Special rules for short‑term and small amount credit contracts     148

124A..................... Prohibition on providing credit assistance in relation to short‑term credit contracts 148

124B...................... Licensee who makes representations about credit assistance in relation to small amount credit contracts must display information etc.................................................... 148

Part 3‑2—Licensees that are credit providers under credit contracts: general rules       150

Division 1—Introduction                                                                                        150

125........................ Guide to this Part............................................................ 150

Division 2—Credit guide of credit providers                                               151

126........................ Credit guide of credit providers...................................... 151

127........................ Credit guide of credit providers who are assignees......... 152

Division 3—Obligation to assess unsuitability                                             154

128........................ Obligation to assess unsuitability.................................... 154

129........................ Assessment of unsuitability of the credit contract........... 154

130........................ Reasonable inquiries etc. about the consumer................. 155

131........................ When credit contract must be assessed as unsuitable...... 156

132........................ Giving the consumer the assessment.............................. 158

Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts       160

133........................ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts                160

Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans                                                                                     163

Division 1—Introduction                                                                                        163

133A..................... Guide to this Part............................................................ 163

Division 2—Key Facts Sheets for standard home loans                        164

133AA.................. What is a standard home loan?...................................... 164

133AB................... What is a Key Facts Sheet for a standard home loan?..... 164

133AC................... Credit provider’s website to provide capacity to generate Key Facts Sheet              165

133AD.................. Credit provider to provide Key Facts Sheet in other situations 166

133AE................... What if more information is needed from the consumer? 167

133AF................... Defences to obligation to provide a Key Facts Sheet...... 168

Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts                                                                                                    170

Division 1—Introduction                                                                                        170

133B...................... Guide to this Part............................................................ 170

Division 2—Credit card contracts and related concepts                       172

133BA................... Meaning of credit card contract etc................................ 172

Division 3—Key Facts Sheets for credit card contract                          174

133BB................... What is a Key Facts Sheet for a credit card contract?...... 174

133BC................... Application form for credit card contract to include up‑to‑date Key Facts Sheet      174

133BD................... Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc.       175

Division 4—Offers etc. to increase, and entitlement to reduce, credit limit of credit card contract     177

133BE................... Credit provider not to offer etc. to increase credit limit of credit card contract          177

133BF................... Credit provider not to enter into credit card contract unless it allows credit limit to be reduced                178

133BFA................ Credit provider to provide online capacity to request reduction of credit limit          179

133BFB................. Credit provider not to suggest the consumer not reduce the credit limit   180

133BFC................. Credit provider to give effect to request to reduce credit limit  181

Division 5—Use of credit card in excess of credit limit                          183

133BH................... Credit provider to notify consumer of use of credit card in excess of credit limit     183

133BI.................... Credit provider not to impose fees etc. because credit card used in excess of credit limit         184

133BJ.................... Records of consents and withdrawals to be kept............ 185

Division 6—Order of application of payments made under credit card contracts          186

133BO................... Credit provider to apply payments in accordance with this Division        186

133BP................... Agreement to apply payment against particular amount owed  187

133BQ................... Application of payment against last statement balance, with higher interest debts to be discharged first  188

133BR................... Application of any remaining part of the relevant payment 188

Division 7—Calculation of interest under credit card contracts      189

133BS................... Credit provider not to impose retrospective interest charges 189

Division 8—Ending credit card contracts                                                     190

133BT................... Credit provider not to enter into credit card contract unless it allows for termination of contracts            190

133BU................... Credit provider to provide online capacity to request termination of credit card contract          191

133BV................... Credit provider not to suggest the consumer not terminate the credit card contract  192

133BW.................. Credit provider to give effect to request to terminate credit card contract 192

Part 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts                              194

Division 1—Introduction                                                                                        194

133C...................... Guide to this Part............................................................ 194

Division 2—Short‑term and small amount credit contracts                195

133CA................... Prohibition on entering, or increasing the credit limit of, short‑term credit contracts                195

133CB................... Licensee who makes representations about small amount credit contracts must display information etc. 195

133CC................... Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements................................................................... 196

Part 3‑2D—Licensees and reverse mortgages                                                  198

133DA.................. Guide to this Part............................................................ 198

133DB................... Giving projections of equity before providing credit assistance or entering credit contract      198

133DC................... Making reverse mortgage information statement available on website of credit provider or credit assistance provider.......................................................................... 200

133DD.................. Making reverse mortgage information statement available in other situations          201

133DE................... Representations that use the term “reverse mortgage” etc. 202

Part 3‑3—Licensees that provide credit assistance in relation to consumer leases             204

Division 1—Introduction                                                                                        204

134........................ Guide to this Part............................................................ 204

135........................ Application of this Part................................................... 205

Division 2—Credit guide of credit assistance providers                        206

136........................ Credit guide of credit assistance providers...................... 206

Division 3—Quote for providing credit assistance etc. in relation to consumer leases 209

137........................ Quote for providing credit assistance etc........................ 209

Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases                                                                                                       211

138........................ Obligations of credit assistance providers before providing credit assistance for consumer leases          211

139........................ Preliminary assessment of unsuitability of the consumer lease                212

140........................ Reasonable inquiries etc. about the consumer................. 212

141........................ When the consumer lease must be assessed as unsuitable—entering lease              213

142........................ When the consumer lease must be assessed as unsuitable—remaining in lease       214

143........................ Providing the consumer with the preliminary assessment 216

Division 5—Fees, indirect remuneration etc. relating to consumer leases           218

144........................ Fees, indirect remuneration etc. relating to consumer leases 218

145........................ No profiting from fees etc. paid to third parties.............. 219

Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases  220

146........................ Prohibition on suggesting, or assisting with, unsuitable consumer leases                220

147........................ Prohibition on suggesting to consumers to remain in unsuitable consumer leases   222

Part 3‑4—Licensees that are lessors under consumer leases                   225

Division 1—Introduction                                                                                        225

148........................ Guide to this Part............................................................ 225

Division 2—Credit guide of lessors                                                                   226

149........................ Credit guide of lessors.................................................... 226

150........................ Credit guide of lessors who are assignees...................... 227

Division 3—Obligation to assess unsuitability                                             229

151........................ Obligation to assess unsuitability.................................... 229

152........................ Assessment of unsuitability of the consumer lease......... 229

153........................ Reasonable inquiries etc. about the consumer................. 229

154........................ When consumer lease must be assessed as unsuitable.... 230

155........................ Giving the consumer the assessment.............................. 231

Division 4—Prohibition on entering unsuitable consumer leases      234

156........................ Prohibition on entering unsuitable consumer leases........ 234

Part 3‑5—Credit representatives                                                                              236

Division 1—Introduction                                                                                        236

157........................ Guide to this Part............................................................ 236

Division 2—Credit guide of credit representatives                                  237

158........................ Credit guide of credit representatives.............................. 237

Part 3‑5A—Mortgage brokers and mortgage intermediaries                 240

Division 1—Introduction                                                                                        240

Subdivision A—Guide to this Part                                                                     240

158K...................... Guide to this Part............................................................ 240

Subdivision B—Interpretation                                                                            240

158KA................... Doing acts....................................................................... 240

158KB................... Circumstances in which a secondary representative is taken to be acting within actual or apparent authority........................................................................................ 241

158KC................... Obligations under this Part in addition to other obligations 241

Division 2—Best interests obligations                                                              242

Subdivision A—Licensees that provide credit assistance in relation to credit contracts             242

158L...................... Application of this Subdivision...................................... 242

158LA................... Licensee must act in the best interests of the consumer... 242

158LB................... Conflict between consumer’s interests and those of the licensee etc.       242

Subdivision B—Credit representatives that provide credit assistance in relation to credit contracts      243

158LD................... Application of this Subdivision...................................... 243

158LE.................... Credit representative must act in the best interests of the consumer         243

158LF.................... Conflict between consumer’s interests and those of the credit representative etc.    243

Division 4—Conflicted remuneration                                                              245

Subdivision A—What is conflicted remuneration?                                       245

158N..................... Conflicted remuneration................................................. 245

158NA.................. Regulations may further define conflicted remuneration 245

Subdivision B—Ban on accepting conflicted remuneration                       246

158NB................... Licensee must not accept conflicted remuneration........... 246

158NC................... Credit representative must not accept conflicted remuneration 246

Subdivision C—Ban on giving conflicted remuneration                             246

158ND.................. Employer must not give employees conflicted remuneration 246

158NE................... Credit provider must not give conflicted remuneration... 247

158NF................... Mortgage intermediary must not give conflicted remuneration 247

Division 6—Miscellaneous                                                                                     249

158T...................... Anti‑avoidance................................................................ 249

Part 3‑6—Debt collectors                                                                                               250

Division 1—Introduction                                                                                        250

159........................ Guide to this Part............................................................ 250

Division 2—Credit guide of debt collectors                                                  251

160........................ Credit guide of debt collectors........................................ 251

Part 3‑6A—Miscellaneous rules                                                                                253

Division 1—Introduction                                                                                        253

160A..................... Guide to this Part............................................................ 253

Division 2—Representations                                                                                 254

160B...................... “Independent”, “impartial” or “unbiased” etc.................. 254

160C...................... “Financial counsellor” etc............................................... 255

Division 3—Giving misleading information                                                  257

160D..................... Prohibition on giving misleading information etc........... 257

Division 4—Giving authorisation for deductions by employer of debtor or lessee         258

160E...................... Requirements for giving authorisation to employer........ 258

Division 5—Periods for determining unsuitability in respect of credit card contracts 260

160F...................... Periods for determining unsuitability in respect of credit card contracts   260

Part 3‑7—Exemptions and modifications relating to this Chapter      261

Division 1—Introduction                                                                                        261

161........................ Guide to this Part............................................................ 261

Division 2—Exemptions and modifications relating to this Chapter 262

162........................ Provisions to which this Part applies.............................. 262

163........................ Exemptions and modifications by ASIC......................... 262

164........................ Exemptions and modifications by the regulations........... 263

Chapter 4—Remedies                                                                                            265

Part 4‑1—Civil penalty provisions                                                                           265

Division 1—Introduction                                                                                        265

165........................ Guide to this Part............................................................ 265

Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions                                                                                                                    266

166........................ Declaration of contravention of civil penalty provision... 266

167........................ Court may order person to pay pecuniary penalty for contravening civil penalty provision     266

167A..................... Maximum pecuniary penalty........................................... 267

167B...................... Pecuniary penalty applicable........................................... 268

167C...................... Relinquishing the benefit derived from contravening a civil penalty provision        269

167D..................... Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision........................................................................................ 270

Division 3—General provisions relating to civil penalty provisions 271

168........................ Contravening a civil penalty provision is not an offence. 271

169........................ Attempt and involvement in contravention treated in same way as actual contravention          271

170........................ Civil evidence and procedure rules for proceedings relating to civil penalty provisions           271

171........................ Criminal proceedings before civil proceedings............... 271

172........................ Criminal proceedings during civil proceedings............... 271

173........................ Criminal proceedings after civil proceedings.................. 272

174........................ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings 272

175........................ Civil double jeopardy...................................................... 273

175A..................... Continuing contraventions of civil penalty provisions.... 273

175B...................... State of mind................................................................... 274

175C...................... Mistake of fact................................................................ 274

175D..................... Exceptions etc. to civil penalty provisions—burden of proof.. 275

175E...................... Civil penalty provisions contravened by employees, agents or officers   275

Part 4‑2—Power of the court to grant remedies                                             277

Division 1—Introduction                                                                                        277

176........................ Guide to this Part............................................................ 277

Division 2—Power of the court to grant remedies                                   278

177........................ Injunctions...................................................................... 278

178........................ Compensation orders...................................................... 279

179........................ Other orders to compensate loss or damage.................... 280

180........................ Orders in relation to unlawful credit activities................. 283

180A..................... Orders to remedy unfair or dishonest conduct by credit service providers               285

181........................ Preference must be given to compensate consumers....... 288

182........................ Adverse publicity orders................................................. 289

183........................ Relief from liability for contravention of civil penalty provision              289

184........................ Multiple remedies may be granted.................................. 290

Part 4‑3—Jurisdiction and procedure of courts                                             291

Division 1—Introduction                                                                                        291

185........................ Guide to this Part............................................................ 291

Division 2—Civil proceedings                                                                              292

Subdivision A—Application of this Division                                                   292

186........................ Application of this Division............................................ 292

Subdivision B—Conferral of civil jurisdiction                                              292

187........................ Civil jurisdiction of courts.............................................. 292

188........................ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers............................................................................ 293

189........................ Cross‑jurisdictional appeals............................................ 295

190........................ Courts to act in aid of each other..................................... 296

Subdivision C—Transfers between courts                                                       296

191........................ Transfers—application of Subdivision........................... 296

192........................ Transfers—exercise of transfer power............................ 297

193........................ Transfers—criteria for transfer....................................... 298

194........................ Transfers—how initiated................................................ 299

195........................ Transfers—documents and procedure............................ 299

196........................ Transfers—conduct of proceedings................................ 299

197........................ Transfers—entitlement to practise as a lawyer................ 300

198........................ Transfers—limitation on appeals.................................... 300

Subdivision D—Other matters                                                                            300

199........................ Plaintiffs may choose small claims procedure................. 300

200........................ Costs only if proceedings brought vexatiously etc.......... 306

201........................ Civil proceedings not to be stayed.................................. 306

202........................ Standard of proof in civil proceedings............................ 306

Division 3—Criminal proceedings                                                                     308

Subdivision A—Application of this Division                                                   308

203........................ Application of this Division............................................ 308

Subdivision B—Conferral of criminal jurisdiction                                      308

204........................ Criminal jurisdiction of courts........................................ 308

205........................ Criminal proceedings—laws to be applied...................... 311

206........................ Criminal proceedings—how taken.................................. 312

207........................ Certain persons to assist in prosecutions........................ 312

208........................ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 313

Division 4—Proceedings generally                                                                    315

209........................ ASIC’s power to intervene in proceedings..................... 315

210........................ Evidence of contravention............................................... 315

211........................ Power of court to punish for contempt of court.............. 316

Chapter 5—Administration                                                                            317

Part 5‑1—Registers relating to credit activities                                                317

Division 1—Introduction                                                                                        317

212........................ Guide to this Part............................................................ 317

Division 2—Registers relating to credit activities                                     318

213........................ Credit registers................................................................ 318

214........................ Inspection and public availability of credit registers........ 319

Part 5‑2—Documents lodged with ASIC or required by this Act        320

Division 1—Introduction                                                                                        320

215........................ Guide to this Part............................................................ 320

Division 2—Lodgment of documents with ASIC                                        321

216........................ When documents are lodged with ASIC......................... 321

217........................ Approved forms for documents to be lodged with ASIC 321

218........................ ASIC may refuse to receive document etc...................... 322

Division 3—ASIC’s register of documents                                                    324

219........................ Register of documents lodged with ASIC...................... 324

220........................ ASIC may require person to give information for document registers     324

221........................ Written document setting out information from document registers is prima facie evidence of matters    325

Division 4—Other provisions relating to documents lodged with ASIC or required under this Act     327

222........................ Certified copy or extract of document lodged with ASIC is admissible in evidence                327

223........................ ASIC may destroy or dispose of certain documents....... 327

224........................ Court may order lodgment of document etc.................... 327

225........................ False or misleading documents....................................... 328

Part 5‑3—Concealment or falsification of credit books                             332

Division 1—Introduction                                                                                        332

226........................ Guide to this Part............................................................ 332

Division 2—Prohibitions relating to the concealment or falsification of credit books   333

227........................ Concealing etc. of credit books....................................... 333

228........................ Falsification of credit books............................................ 334

229........................ Precautions against falsification of credit books............. 335

Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 336

Division 1—Introduction                                                                                        336

230........................ Guide to this Part............................................................ 336

Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009          337

231........................ Fees are payable to the Commonwealth.......................... 337

232........................ Lodgment of document without payment of fee.............. 337

233........................ Doing act without payment of fee................................... 337

234........................ Effect of sections 232 and 233........................................ 337

235........................ Waiver and refund of fees............................................... 338

236........................ Debts due to the Commonwealth.................................... 338

237........................ Payment of fee does not give right to inspect or search.. 338

Part 5‑5—Other administrative matters                                                               339

Division 1—Introduction                                                                                        339

238........................ Guide to this Part............................................................ 339

Division 1A—Codes of conduct                                                                           340

Subdivision A—Approved codes of conduct                                                    340

238A..................... Approved codes of conduct............................................ 340

238B...................... Variations to approved codes of conduct........................ 341

238C...................... Review of approved codes of conduct............................ 342

238D..................... Obligation to comply with enforceable code provisions. 342

238E...................... Regulations..................................................................... 342

Subdivision B—Mandatory codes of conduct                                                 343

238F...................... Mandatory codes of conduct........................................... 343

238G..................... Obligation to comply with mandatory code of conduct... 343

Division 2—Other administrative matters                                                    344

239........................ ASIC has general administration of this Act................... 344

240........................ Obstructing or hindering ASIC etc................................. 344

242........................ ASIC may arrange for use of computer programs to make decisions      344

243........................ Qualified privilege for information given to ASIC......... 345

244........................ ASIC certificate is prima facie evidence of matters......... 345

245........................ Operator of AFCA scheme may give information to ASIC 346

Chapter 6—Compliance and enforcement                                     347

Part 6‑1—Investigations                                                                                                 347

Division 1—Introduction                                                                                        347

246........................ Guide to this Part............................................................ 347

Division 2—Investigations                                                                                     348

247........................ General powers of investigation..................................... 348

248........................ Minister may direct investigations.................................. 348

249........................ Interim report on investigation........................................ 349

250........................ Final report on investigation........................................... 350

251........................ Distribution of report...................................................... 350

Part 6‑2—Examination of persons                                                                          352

Division 1—Introduction                                                                                        352

252........................ Guide to this Part............................................................ 352

Division 2—Examination of persons                                                                353

253........................ Notice requiring appearance for examination.................. 353

254........................ Proceedings at examination............................................. 353

255........................ Requirements made of examinee..................................... 353

256........................ Examination to take place in private................................ 354

257........................ Examinee’s lawyer may attend........................................ 354

258........................ Record of examination.................................................... 355

259........................ Giving to other persons copies of record........................ 356

260........................ Copies given subject to conditions.................................. 356

261........................ Record to accompany report........................................... 357

Part 6‑3—Inspection of books and audit information‑gathering powers                358

Division 1—Introduction                                                                                        358

262........................ Guide to this Part............................................................ 358

Division 2—Inspection of books and audit information‑gathering powers          359

263........................ When certain powers may be exercised.......................... 359

264........................ ASIC may inspect books without charge........................ 359

265........................ Notice to auditors concerning information and books..... 360

266........................ Notice to produce books about credit activities............... 361

267........................ Notice to produce documents in person’s possession..... 362

268........................ ASIC may authorise persons to require production of books, giving of information etc.        362

271........................ Powers if books produced or seized............................... 363

272........................ Powers if books not produced........................................ 365

Part 6‑3A—Search warrants                                                                                      366

Division 1—Introduction                                                                                        366

272A..................... Guide to this Part............................................................ 366

Division 2—Extra application of Crimes Act search warrant provisions            367

Subdivision A—Basic extra application                                                           367

272B...................... Extra application of Crimes Act search warrant provisions 367

272C...................... Interpretation of modifications........................................ 368

Subdivision B—Modifications                                                                            368

272D..................... Major modifications—evidential material....................... 368

272E...................... Major modifications—who may apply for a warrant etc. 368

272F...................... Major modifications—purposes for which things may be used and shared             369

272G..................... Minor modifications....................................................... 373

Part 6‑4—Proceedings after an investigation                                                    375

Division 1—Introduction                                                                                        375

273........................ Guide to this Part............................................................ 375

Division 2—Proceedings after an investigation                                          376

274........................ ASIC may prosecute....................................................... 376

275........................ ASIC may bring civil proceedings.................................. 377

Part 6‑5—Hearings                                                                                                            378

Division 1—Introduction                                                                                        378

276........................ Guide to this Part............................................................ 378

Division 2—Hearings                                                                                                379

277........................ Power to hold hearings................................................... 379

278........................ General discretion to hold hearing in public or private.... 379

279........................ Request by person appearing at hearing that it take place in public          379

280........................ Certain hearings to take place in private.......................... 380

281........................ ASIC may restrict publication of certain material............ 380

282........................ Who may be present when hearing takes place in private 381

283........................ Involvement of person entitled to appear at hearing........ 382

284........................ Power to summon witnesses and take evidence.............. 382

285........................ Proceedings at hearings.................................................. 383

286........................ ASIC to take account of evidence and submissions........ 384

287........................ Reference to court of question of law arising at hearing. 384

288........................ Protection of ASIC members etc.................................... 385

Part 6‑5A—Penalties for offences                                                                            386

Division 1—Introduction                                                                                        386

288A..................... Guide to this Part............................................................ 386

Division 2—Penalty for committing an offence                                          387

288B...................... Penalty for committing an offence.................................. 387

288C...................... Penalty applicable to an offence committed by an individual 387

288D..................... Penalty applicable to an offence committed by a body corporate              388

288E...................... Meaning of benefit derived and detriment avoided because of an offence               389

288F...................... Where is the penalty for an offence specified?................ 389

288G..................... If no penalty is specified................................................. 390

Part 6‑5B—Infringement notices                                                                              391

Division 1—Introduction                                                                                        391

288H..................... Guide to this Part............................................................ 391

Division 2—Infringement notices                                                                       392

288J....................... When an infringement notice may be given.................... 392

288K...................... Provisions subject to an infringement notice................... 392

288L...................... Matters to be included in an infringement notice............. 393

288M..................... Payment period............................................................... 396

288N..................... Extension of time to pay amount..................................... 397

288P...................... Payment by instalments.................................................. 398

288Q..................... Withdrawal of an infringement notice............................. 399

288R...................... Effect of payment of amount........................................... 401

288S...................... Effect of this Part............................................................ 402

Part 6‑6—Offences under this Chapter                                                               403

Division 1—Introduction                                                                                        403

289........................ Guide to this Part............................................................ 403

Division 2—Offences                                                                                                 404

290........................ Contraventions of requirements made under this Chapter 404

291........................ False information............................................................ 405

293........................ Disrupting hearings........................................................ 405

294........................ Concealing books relevant to investigation..................... 406

295........................ Self‑incrimination........................................................... 406

296........................ Legal professional privilege............................................ 407

297........................ Powers of court relating to contraventions of this Chapter 408

Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter  410

Division 1—Introduction                                                                                        410

298........................ Guide to this Part............................................................ 410

Division 2—ASIC’s powers in relation to contraventions of this Chapter          411

299........................ Application of this Part................................................... 411

300........................ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases         411

301........................ Orders under this Part..................................................... 412

Part 6‑7A—Product intervention orders                                                             413

Division 1—Introduction                                                                                        413

301A..................... Guide to this Part............................................................ 413

Division 2—Product intervention orders                                                       414

301B...................... Definitions...................................................................... 414

301C...................... Application of product intervention orders..................... 414

301D..................... ASIC may make product intervention orders.................. 414

301E...................... Significant detriment to consumers................................. 416

301F...................... ASIC to consult before making product intervention orders 416

301G..................... Commencement and duration of product intervention orders 417

301H..................... Extension of product intervention orders........................ 418

301J....................... Amendment of product intervention orders.................... 419

301K...................... Revocation of product intervention orders...................... 420

301L...................... ASIC to issue public notice of product intervention orders 420

301M..................... Remaking product intervention orders............................ 422

301N..................... Product intervention orders may require notification...... 422

301P...................... Enforcement of product intervention orders.................... 422

Part 6‑8—Evidentiary use of certain material                                                  424

Division 1—Introduction                                                                                        424

302........................ Guide to this Part............................................................ 424

Division 2—Evidentiary use of certain material                                        425

303........................ Statements made at an examination: proceedings against examinee          425

304........................ Statements made at an examination: other proceedings... 426

305........................ Weight of evidence admitted under section 304.............. 426

306........................ Objection to admission of statements made at examination 427

307........................ Copies of, or extracts from, certain books...................... 428

308........................ Report under Part 6‑1..................................................... 429

309........................ Exceptions to admissibility of report............................... 429

310........................ Material otherwise admissible......................................... 430

Part 6‑9—Miscellaneous provisions relating to compliance and enforcement      431

Division 1—Introduction                                                                                        431

311........................ Guide to this Part............................................................ 431

Division 2—Miscellaneous provisions relating to compliance and enforcement               432

312........................ Requirement made of a body corporate........................... 432

313........................ Evidence of authority...................................................... 432

314........................ Giving documents to natural persons.............................. 432

315........................ Place and time for production of books.......................... 433

316........................ Application of Crimes Act and Evidence Act................. 433

317........................ Allowances and expenses............................................... 433

318........................ Expenses of investigation under Part 6‑1........................ 434

319........................ Recovery of expenses of investigation............................ 434

320........................ Compliance with this Chapter......................................... 435

321........................ Effect of this Chapter...................................................... 435

322........................ Enforcement of undertakings.......................................... 435


An Act relating to credit, and for related purposes

Chapter 1Introduction

Part 1‑1Introduction

  

1  Short title

                   This Act may be cited as the National Consumer Credit Protection Act 2009.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 and 2 and anything in this Act not elsewhere covered by this table

The day on which this Act receives the Royal Assent.

15 December 2009

2.  Sections 3 to 337 and Schedule 1

A single day to be fixed by Proclamation.

However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.

1 April 2010

(see F2010L00301)

Note:          This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

             (2)  Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.

3  The National Credit Code

                   Schedule 1 (which is the National Credit Code) has effect as a law of the Commonwealth.

Part 1‑2Definitions

Division 1Introduction

4  Guide to this Part

This Part is about the terms that are defined in this Act (other than the National Credit Code). (For the terms that are defined in the National Credit Code, see section 204 of that Code.)

Division 2 has the Dictionary (see section 5). The Dictionary is a list of every term that is defined in this Act (other than the National Credit Code). A term will either be defined in the Dictionary itself, or in another provision of this Act. If another provision defines the term, the Dictionary will have a signpost to that definition.

Division 3 has definitions relating to the meaning of credit activity.

Division 4 has some other definitions that apply across this Act (other than the National Credit Code).

Division 2The Dictionary

5  The Dictionary

             (1)  In this Act (other than the National Credit Code):

acts as an intermediary: see section 9.

ADI has the same meaning as in subsection 5(1) of the Banking Act 1959.

adverse publicity order: see section 182.

AFCA scheme has the same meaning as in Chapter 7 of the Corporations Act 2001.

affairs, in relation to a person that is a body corporate, has the same meaning as in Part 3 of the ASIC Act.

affidavit includes affirmation.

ancillary offence, in relation to another offence, means:

                     (a)  an offence against section 6 of the Crimes Act 1914; or

                     (b)  an ancillary offence within the meaning of the Criminal Code;

that relates to the other offence.

annual percentage rate has the same meaning as in section 27 of the National Credit Code.

annual turnover, of a body corporate during a 12‑month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12‑month period, other than:

                     (a)  supplies made from any of those bodies corporate to any other of those bodies corporate; or

                     (b)  supplies that are input taxed; or

                     (c)  supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); or

                     (d)  supplies that are not made in connection with an enterprise that the body corporate carries on; or

                     (e)  supplies that are not connected with Australia.

Expressions used in this definition that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

appeal includes:

                     (a)  an application for a new trial; and

                     (b)  proceedings to review or call in question the proceedings, decision or jurisdiction of a court or judge.

approved code of conduct means a code of conduct approved by ASIC by legislative instrument under section 238A, and includes a replacement code of conduct approved under that section.

APRA means the Australian Prudential Regulation Authority.

ASIC means the Australian Securities and Investments Commission.

ASIC Act means the Australian Securities and Investments Commission Act 2001, and includes instruments made under that Act.

ASIC member means a member of ASIC within the meaning of the ASIC Act.

ASIC staff member means a staff member within the meaning of subsection 5(1) of the ASIC Act.

associate: see section 15A.

Australia, when used in a geographical sense, does not include an external Territory.

Note:          Section 2B of the Acts Interpretation Act 1901 would otherwise provide that Australia included the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands.

Australian credit licence: see subsection 35(1).

Australian credit licence number means the number given to a licence under section 43.

Australian financial services licence has the same meaning as in section 761A of the Corporations Act 2001.

authorised, in relation to a credit activity: see subsection 35(2).

banker has the same meaning as in section 9 of the Corporations Act 2001.

banned from engaging in a credit activity under a law of a State or Territory: a person is banned from engaging in a credit activity under a law of a State or Territory if:

                     (a)  the person holds a State or Territory credit licence that is suspended (otherwise than by request of the person); or

                     (b)  the person has held a State or Territory credit licence that has been cancelled within the last 7 years (otherwise than by the person’s request); or

                     (c)  an order of a court made under a law of a State or Territory prohibits the person from engaging in a credit activity; or

                     (d)  the person is otherwise prohibited under a law of a State or Territory from engaging in a credit activity.

banning order means an order made under subsection 80(1).

beneficiary of a guarantee means a person who is a party to a guarantee and who has the benefit of the guarantee, and includes a person who is a beneficiary of a guarantee because of section 10.

benefit derived and detriment avoided:

                     (a)  because of an offence—has the meaning given by section 288E; and

                     (b)  because of a contravention of a civil penalty provision—has the meaning given by section 167D.

body regulated by APRA has the same meaning as in subsection 3(2) of the Australian Prudential Regulation Authority Act 1998.

book includes:

                     (a)  a register; and

                     (b)  any other record of information; and

                     (c)  financial reports or financial records, however compiled, recorded or stored; and

                     (d)  a document.

business day has the same meaning as in section 204 of the National Credit Code.

carried on in this jurisdiction has a meaning affected by section 12.

civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if:

                     (a)  the words “civil penalty” and one or more amounts in penalty units are set out at the foot of the subsection (or section); or

                     (b)  another provision of this Act specifies that the subsection (or section) is a civil penalty provision.

coastal sea:

                     (a)  in relation to Australia—means:

                              (i)  the territorial sea of Australia; and

                             (ii)  the sea on the landward side of the territorial sea of Australia and not within the limits of a State or internal Territory;

                            and includes the airspace over, and the sea‑bed and subsoil beneath, any such sea; and

                     (b)  in relation to a State or Territory—means so much of the coastal sea of Australia as is within the area described in Schedule 1 to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 under the heading that refers to that State or Territory.

code of conduct means a code of conduct that relates to any aspect of the activities of:

                     (a)  licensees; or

                     (b)  credit representatives;

being activities in relation to which ASIC has a regulatory responsibility.

commission includes any financial or other benefit in the nature of a commission.

Note:          Commissions may be conflicted remuneration: see Division 4 of Part 3‑5A.

Commonwealth credit legislation means this Act and the Transitional Act.

conflicted remuneration: see sections 158N and 158NA.

consumer means a natural person or a strata corporation.

consumer lease means a consumer lease to which Part 11 of the National Credit Code applies.

continuing credit contract has the same meaning as in section 204 of the National Credit Code.

contravention:

                     (a)  in relation to an offence against a law—includes an ancillary offence relating to the offence against the law; and

                     (b)  in relation to a civil penalty provision—has a meaning affected by section 169.

control has the meaning given by section 16A.

credit has the same meaning as in subsection 3(1) of the National Credit Code.

credit activity: see section 6.

credit assistance: see section 8.

credit book: see subsection 227(4).

credit card: see subsection 133BA(2).

credit card contract: see subsection 133BA(1).

credit card termination entitlement: see subsection 133BT(3).

credit contract has the same meaning as in section 4 of the National Credit Code.

credit legislation means:

                     (a)  this Act; and

                     (b)  the Transitional Act; and

                     (c)  Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division; and

                     (d)  any other Commonwealth, State or Territory legislation that covers conduct relating to credit activities (whether or not it also covers other conduct), but only in so far as it covers conduct relating to credit activities.

credit limit of a credit contract means the maximum amount of credit that may be provided under the contract.

credit limit increase invitation, in relation to a credit card contract: see subsection 133BE(5).

credit limit reduction entitlement: see subsection 133BF(3).

credit provider has the same meaning as in section 204 of the National Credit Code, and includes a person who is a credit provider because of section 10.

credit registers: see section 213.

credit representative: see subsections 64(2) and 65(2).

credit representative number means the number given to a credit representative under section 72.

credit service: see section 7.

criminal procedure: see section 205.

debtor has the same meaning as in section 204 of the National Credit Code.

director has the same meaning as in section 9 of the Corporations Act 2001.

disqualification order means an order of the court under section 86.

document registers: see section 219.

enforceable code provision means a provision of an approved code of conduct identified by ASIC under subsection 238A(2).

engage in conduct means:

                     (a)  do an act; or

                     (b)  omit to perform an act.

examination, when used in Chapter 6 (which deals with compliance and enforcement), means an examination of a person pursuant to a requirement made under section 253.

expenses, in relation to an investigation under Part 6‑1, includes costs and expenses incurred by ASIC in relation to proceedings brought under section 275 as a result of the investigation.

Federal Circuit Court means the Federal Circuit Court of Australia.

Federal Court means the Federal Court of Australia.

financial records: see subsection 88(2).

financial year: see subsection 100(6).

function includes a duty.

give:

                     (a)  when used in Chapter 6 (which deals with compliance and enforcement) in relation to a document—has a meaning affected by section 314; and

                     (b)  when used in relation to information, includes:

                              (i)  explaining or stating a matter; and

                             (ii)  identifying a person, matter or thing; and

                            (iii)  disclosing information; and

                            (iv)  answering a question.

guarantee means a guarantee to which the National Credit Code applies.

hearing, when used in Chapter 6 (which deals with compliance and enforcement), means a hearing before ASIC and, in sections 278, 280, 281 and 282 (which are in that Chapter), includes part of such a hearing.

indirect remuneration means a commission or conflicted remuneration.

individual fine formula means the formula set out in subsection 288C(3).

infringement notice means a notice given under section 288J.

initial National Credit Code: see subsection 20(2).

insolvent means:

                     (a)  in the case of a natural person—a person who is an insolvent under administration; or

                     (b)  in the case of a body corporate—a body corporate that is a Chapter 5 body corporate (within the meaning of the Corporations Act 2001); or

                     (c)  in the case of a partnership—a partnership against which a creditor’s petition or a debtor’s petition is presented under Division 2 or 3 of Part IV of the Bankruptcy Act 1966.

investigate, in relation to ASIC, means investigate in the course of performing any of ASIC’s functions or exercising any of ASIC’s powers.

involved in: a person is involved in a contravention of a provision of legislation if, and only if, the person:

                     (a)  has aided, abetted, counselled or procured the contravention; or

                     (b)  has induced the contravention, whether by threats or promises or otherwise; or

                     (c)  has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

                     (d)  has conspired with others to effect the contravention.

judgment means a judgment, decree or order, whether final or interlocutory.

Key Facts Sheet:

                     (a)  for a credit card contract—see section 133BB; and

                     (b)  for a standard home loan—see section 133AB.

law of a referring State or a Territory means a law of, or in force in, a referring State or a Territory but does not include a law of the Commonwealth in force in the referring State or the Territory.

law of a State or Territory means a law of, or in force in, a State or Territory but does not include a law of the Commonwealth in force in the State or Territory.

lawyer means a person who is admitted to the legal profession by a federal court or a Supreme Court of a State or Territory.

lessee means the lessee under a consumer lease.

lessor has the same meaning as in section 204 of the National Credit Code, and includes a person who is a lessor because of section 10.

licence means an Australian credit licence.

licensee means a person who holds a licence.

licensing anniversary: see subsection 53(7).

linked: for when a credit card is linked to a credit card contract, see subsection 133BA(3).

lodge with ASIC: see section 216.

lower court means:

                     (a)  the Federal Circuit Court; or

                     (b)  a court of a State or Territory that is not a superior court.

malice: see subsection 16(2).

mandatory code of conduct means a code of conduct that is declared by regulations under section 238F to be mandatory.

matter includes an act, an omission, a body, a person or a thing.

misleading: see section 13.

mortgage means a mortgage to which the National Credit Code applies.

mortgage broker: see section 15B.

mortgagee means the mortgagee under a mortgage, and includes a person who is a mortgagee because of section 10.

mortgage intermediary: see section 15C.

mortgagor means the mortgagor under a mortgage.

National Credit Code means Schedule 1 to this Act, and includes:

                     (a)  regulations made under section 329 for the purposes of that Schedule; and

                     (b)  instruments made under that Schedule.

officer of the Commonwealth has the same meaning as in paragraph 75(v) of the Constitution.

payment period, in relation to an infringement notice, has the meaning given by section 288M.

pecuniary penalty order means an order made under section 167.

penalty unit has the same meaning as in section 4AA of the Crimes Act 1914.

person has a meaning affected by section 14 (which deals with partnerships) and section 15 (which deals with multiple trustees).

power includes an authority.

premises includes:

                     (a)  a structure, building, aircraft, vehicle or vessel; and

                     (b)  any land or place (whether enclosed or built in or not); and

                     (c)  a part of a structure, building, aircraft, vehicle, vessel or of such a place.

prescribed State or Territory order means an order under a law of a State or Territory, being an order of a kind prescribed by the regulations.

proceedings:

                     (a)  when used in Chapter 6 (which deals with compliance and enforcement)—has the same meaning as the definition of proceeding in subsection 5(1) of the ASIC Act; and

                     (b)  otherwise—means proceedings, whether criminal or civil, before a court.

qualified privilege has a meaning affected by section 16.

receiving court: see section 191.

record, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, means the whole or part of a record made under section 258 of statements made at the examination.

referred credit matter: see subsection 20(1).

referring State: see section 19.

registered company auditor has the same meaning as in section 9 of the Corporations Act 2001.

related body corporate has the same meaning as in section 9 of the Corporations Act 2001.

related criminal justice process decision: see section 188.

relevant criminal law: see subsection 204(5).

relevant superior court, in relation to a lower court, means:

                     (a)  if the lower court is the Federal Circuit Court—the Federal Court; or

                     (b)  if the lower court is a court of a State or Territory—the Supreme Court of the State or Territory.

relinquishment order means an order made under subsection 167C(1).

representative of a person means:

                     (a)  if the person is a licensee:

                              (i)  an employee or director of the licensee; or

                             (ii)  an employee or director of a related body corporate of the licensee; or

                            (iii)  a credit representative of the licensee; or

                            (iv)  any other person acting on behalf of the licensee; or

                     (b)  otherwise:

                              (i)  an employee or director of the person; or

                             (ii)  an employee or director of a related body corporate of the person; or

                            (iii)  any other person acting on behalf of the person.

residential property has the same meaning as in section 204 of the National Credit Code.

reverse mortgage has the same meaning as in section 13A of the National Credit Code.

reverse mortgage information statement means a document relating to reverse mortgages that complies with the regulations.

senior manager has the same meaning as in section 9 of the Corporations Act 2001.

serious fraud means an offence involving fraud or dishonesty, being an offence:

                     (a)  against a law of the Commonwealth, or of a State or Territory, or any other law; and

                     (b)  punishable by imprisonment for life or for a period, or maximum period, of at least 3 months.

short‑term credit contract: a credit contract is a short‑term credit contract if:

                     (a)  the contract is not a continuing credit contract; and

                     (b)  the credit provider under the contract is not an ADI; and

                     (c)  the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and

                     (d)  the term of the contract is 15 days or less; and

                     (e)  the contract meets any other requirements prescribed by the regulations.

small amount credit contract: a credit contract is a small amount credit contract if:

                     (a)  the contract is not a continuing credit contract; and

                     (b)  the credit provider under the contract is not an ADI; and

                     (c)  the credit limit of the contract is $2,000 (or such other amount as is prescribed by the regulations) or less; and

                     (d)  the term of the contract is at least 16 days but not longer than 1 year (or such other number of years as is prescribed by the regulations); and

                     (e)  the debtor’s obligations under the contract are not, and will not be, secured; and

                      (f)  the contract meets any other requirements prescribed by the regulations.

standard home loan: see subsection 133AA(1).

State, when used in a geographical sense, includes the coastal sea of the State.

statement, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, includes a question asked, an answer given, and any other comment or remark made, at the examination.

state of mind: the state of mind of a person includes:

                     (a)  the knowledge, intention, opinion, belief or purpose of the person; and

                     (b)  the person’s reasons for the intention, opinion, belief or purpose.

State or Territory credit licence means a licence or registration that:

                     (a)  is granted under a law of a State or Territory; and

                     (b)  authorises the licensee or registered person to engage in a credit activity.

strata corporation has the same meaning as in section 204 of the National Credit Code.

subject to an infringement notice, in relation to an offence provision or civil penalty provision, has the meaning given by section 288K.

subscriber, in relation to an approved code of conduct:

                     (a)  means a person or entity that agrees, in a way required by the applicant for the code’s approval, to be bound by the code; and

                     (b)  if a person or entity no longer agrees to be bound by the code—includes the person or entity during the period that the person or entity did agree to be so bound.

superior court means any of the following courts:

                     (a)  the Federal Court;

                     (b)  the Supreme Court of a State or Territory.

Territory means:

                     (a)  the Australian Capital Territory; or

                     (b)  the Northern Territory; or

                     (c)  the Jervis Bay Territory;

and, when used in a geographical sense, includes the coastal sea of the Territory.

this Act includes instruments made under this Act.

this jurisdiction: see subsections 21(2) and (3).

transfer matter: see section 191.

transferring court: see section 191.

Transitional Act means the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009, and includes instruments made under that Act.

tribunal means:

                     (a)  a tribunal in Australia; or

                     (b)  any other body, authority or person in Australia having power, by law or by consent of parties, to hear, receive or examine evidence.

use of a credit card: see subsection 133BA(4).

value of a credit contract, mortgage, guarantee or consumer lease: see section 199.

within the authority: a representative’s conduct is within the authority of a person if:

                     (a)  for a representative who is an employee of the person or of a related body corporate of the person—the conduct is within the scope of the employee’s employment; or

                     (b)  for a representative who is a director of the person or of a related body corporate of the person—the conduct is within the scope of the director’s duties as director; or

                     (c)  for a representative who is a credit representative of the person—the conduct is within the scope of the authorisation of the credit representative under subsection 64(1) or 65(1); or

                     (d)  otherwise—the conduct is within the scope of the authority given by the person.

witness, in relation to a hearing before ASIC, means a person appearing at the hearing to give evidence.

written record, when used in Chapter 6 (which deals with compliance and enforcement) in relation to an examination, means:

                     (a)  a record of the examination:

                              (i)  that is made in writing; or

                             (ii)  as reduced to writing; or

                     (b)  a part of such a record.

             (2)  In this Act (other than the National Credit Code), a reference to a provision is a reference to a provision of this Act, unless the contrary intention appears.

Division 3Definitions relating to the meaning of credit activity

6  Meaning of credit activity

             (1)  The following table sets out when a person engages in a credit activity.

 

Meaning of credit activity

Item

Topic

A person engages in a credit activity if:

1

credit contracts

(a) the person is a credit provider under a credit contract; or

(b) the person carries on a business of providing credit, being credit the provision of which the National Credit Code applies to; or

(c) the person performs the obligations, or exercises the rights, of a credit provider in relation to a credit contract or proposed credit contract (whether the person does so as the credit provider or on behalf of the credit provider); or

2

credit service

the person provides a credit service; or

3

consumer leases

(a) the person is a lessor under a consumer lease; or

(b) the person carries on a business of providing consumer leases; or

(c) the person performs the obligations, or exercises the rights, of a lessor in relation to a consumer lease or proposed consumer lease (whether the person does so as the lessor or on behalf of the lessor); or

4

mortgages

(a) the person is a mortgagee under a mortgage; or

(b) the person performs the obligations, or exercises the rights, of a mortgagee in relation to a mortgage or proposed mortgage (whether the person does so as the mortgagee or on behalf of the mortgagee); or

5

guarantees

(a) the person is the beneficiary of a guarantee; or

(b) the person performs the obligations, or exercises the rights, of another person who is a beneficiary of a guarantee or proposed guarantee, in relation to the guarantee or proposed guarantee (whether the person does so on the person’s own behalf or on behalf of the other person); or

6

prescribed activities

the person engages in an activity prescribed by the regulations in relation to credit, being credit the provision of which the National Credit Code applies to, or would apply to if the credit were provided.

             (2)  A subclass of any of the conduct referred to in the table in subsection (1) is also a credit activity.

Note:          For example, ASIC could impose a condition on a licence under subsection 45(6) that provides that a person is authorised to be a credit provider only under particular types of credit contracts (such as credit card contracts).

7  Meaning of credit service

                   A person provides a credit service if the person:

                     (a)  provides credit assistance to a consumer; or

                     (b)  acts as an intermediary.

8  Meaning of credit assistance

                   A person provides credit assistance to a consumer if, by dealing directly with the consumer or the consumer’s agent in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:

                     (a)  suggests that the consumer apply for a particular credit contract with a particular credit provider; or

                     (b)  suggests that the consumer apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or

                     (c)  suggests that the consumer remain in a particular credit contract with a particular credit provider; or

                     (d)  assists the consumer to apply for a particular credit contract with a particular credit provider; or

                     (e)  assists the consumer to apply for an increase to the credit limit of a particular credit contract with a particular credit provider; or

                      (f)  suggests that the consumer apply for a particular consumer lease with a particular lessor; or

                     (g)  suggests that the consumer remain in a particular consumer lease with a particular lessor; or

                     (h)  assists the consumer to apply for a particular consumer lease with a particular lessor.

It does not matter whether the person does so on the person’s own behalf or on behalf of another person.

9  Meaning of acts as an intermediary

                   A person acts as an intermediary if, in the course of, as part of, or incidentally to, a business carried on in this jurisdiction by the person or another person, the person:

                     (a)  acts as an intermediary (whether directly or indirectly) between a credit provider and a consumer wholly or partly for the purposes of securing a provision of credit for the consumer under a credit contract for the consumer with the credit provider; or

                     (b)  acts as an intermediary (whether directly or indirectly) between a lessor and a consumer wholly or partly for the purposes of securing a consumer lease for the consumer with the lessor.

It does not matter whether the person does so on the person’s own behalf or on behalf of another person.

10  Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee

             (1)  For the purposes of this Act (other than the National Credit Code), a person is a credit provider, lessor, mortgagee or beneficiary of a guarantee whether the person is:

                     (a)  the original credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee; or

                     (b)  a person to whom the rights of a credit provider, lessor, mortgagee or beneficiary of a guarantee under a credit contract, consumer lease, mortgage or guarantee have been assigned or passed by law.

Note:          For example, a person who is assigned the rights of a credit provider under a credit contract would engage in a credit activity within the meaning of paragraph (a) of item 1 of the table in subsection 6(1).

             (2)  For the purposes of paragraph (1)(b), it does not matter whether an assignment or passing by law of rights is the first or a subsequent assignment or passing by law of those rights.

Division 4Other definitions

12  When a business is carried on in this jurisdiction

             (1)  Division 3 of Part 1.2 of the Corporations Act 2001 applies for the purposes of working out whether a business is carried on in this jurisdiction.

             (2)  Without limiting subsection (1), a business is taken to be carried on in this jurisdiction by a person if, in the course of carrying on the business, the person engages in conduct that is:

                     (a)  intended to induce people in this jurisdiction to use the goods or services the person provides; or

                     (b)  is likely to have that effect;

whether or not the conduct is intended, or likely, to have that effect in other places as well.

13  Meaning of misleading

             (1)  A representation made by a person is misleading if:

                     (a)  the representation relates to a future matter (including the doing of, or refusing to do, any act); and

                     (b)  the person does not have reasonable grounds for making the representation.

             (2)  Subsection (1) does not limit the circumstances in which a representation may be misleading.

14  Meaning of person—generally includes a partnership

             (1)  This Act (other than the National Credit Code) applies to a partnership as if the partnership were a person, but it applies with the following changes:

                     (a)  obligations that would be imposed on the partnership are imposed instead on each partner, but may be discharged by any of the partners;

                     (b)  any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the partnership is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each partner who:

                              (i)  aided, abetted, counselled or procured the relevant act or omission; or

                             (ii)  was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the partner).

Note:          For the purposes of paragraph (b), to determine whether the partnership has contravened this Act, see section 325.

             (2)  For the purposes of this Act (other than the National Credit Code), a change in the composition of a partnership does not affect the continuity of the partnership.

             (3)  Subsections (1) and (2) have effect subject to:

                     (a)  an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and

                     (b)  the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.

15  Meaning of person—generally includes multiple trustees

             (1)  This section applies in relation to a trust during a period while the trust continues to have:

                     (a)  2 or more trustees; or

                     (b)  a single trustee who was a trustee of the trust at a time when it had 2 or more trustees.

             (2)  Subject to subsections (3) and (4), during the period this Act (other than the National Credit Code) applies to the trust as if the trustee or trustees of the trust from time to time during the period were a single person (the notional person) that remained the same for the duration of that period.

Note:          So, for example, a licence granted under this Act during the period to the trustees of the trust will continue in force, despite a change in the persons who are the trustees.

             (3)  If, during the period or any part of the period, the trust has 2 or more trustees, this Act (other than the National Credit Code) applies to the trustees as referred to in subsection (2), but it applies with the following changes:

                     (a)  obligations that would be imposed on the notional person are imposed instead on each trustee, but may be discharged by any of the trustees;

                     (b)  any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the notional person is taken (whether for the purposes of criminal or civil liability) to have been a contravention by each trustee who:

                              (i)  aided, abetted, counselled or procured the relevant act or omission; or

                             (ii)  was in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission of the trustee).

Note:          For the purposes of paragraph (b), to determine whether the notional person has contravened this Act, see section 325.

             (4)  If, during the period or any part of the period, the trust has only one trustee, this Act (other than the National Credit Code) applies to the trustee as referred to in subsection (2), but it applies with the following changes:

                     (a)  obligations that would be imposed on the notional person are imposed instead on that single trustee;

                     (b)  any contravention of this Act (other than the National Credit Code) that would otherwise be a contravention by the notional person is taken (whether for the purposes of criminal or civil liability) to have been a contravention by that single trustee.

             (5)  Subsections (2), (3) and (4) have effect subject to:

                     (a)  an express or implied contrary intention in a provision of this Act (other than the National Credit Code); and

                     (b)  the regulations, which may exclude or modify the effect of those subsections in relation to specified provisions.

15A  Meaning of associate

             (1)  If a person is associated with a credit provider for the purposes of the National Credit Code:

                     (a)  the person is an associate of the credit provider; and

                     (b)  the credit provider is an associate of the person.

             (2)  In any other case, a person is an associate of another person in the circumstances prescribed by the regulations.

15B  Meaning of mortgage broker

             (1)  A licensee is a mortgage broker if:

                     (a)  the licensee carries on a business of providing credit assistance in relation to credit contracts secured by mortgages over residential property; and

                     (b)  the licensee does not perform the obligations, or exercise the rights, of a credit provider in relation to the majority of those credit contracts; and

                     (c)  in carrying on the business, the licensee provides credit assistance in relation to credit contracts offered by more than one credit provider.

             (2)  A credit representative of a licensee is a mortgage broker if:

                     (a)  the credit representative carries on a business of providing credit assistance in relation to credit contracts secured by mortgages over residential property; and

                     (b)  neither the credit representative nor the licensee performs the obligations, or exercises the rights, of a credit provider in relation to the majority of those credit contracts; and

                     (c)  in carrying on the business, the credit representative provides credit assistance in relation to credit contracts offered by more than one credit provider.

15C  Meaning of mortgage intermediary

             (1)  A licensee is a mortgage intermediary if:

                     (a)  the licensee carries on a business of acting as an intermediary in relation to credit contracts secured by mortgages over residential property; and

                     (b)  the licensee does not perform the obligations, or exercise the rights, of a credit provider in relation to the majority of those credit contracts; and

                     (c)  in carrying on the business, the licensee acts as an intermediary in relation to credit contracts offered by more than one credit provider.

             (2)  A credit representative of a licensee is a mortgage intermediary if:

                     (a)  the credit representative carries on a business of acting as an intermediary in relation to credit contracts secured by mortgages over residential property; and

                     (b)  neither the credit representative nor the licensee performs the obligations, or exercises the rights, of a credit provider in relation to the majority of those credit contracts; and

                     (c)  in carrying on the business, the credit representative acts as an intermediary in relation to credit contracts offered by more than one credit provider.

16  Qualified privilege

             (1)  If this Act provides that a person has qualified privilege in relation to an act, matter or thing, then the person:

                     (a)  has qualified privilege in proceedings for defamation; or

                     (b)  is not, in the absence of malice on the person’s part, liable to an action for defamation at the suit of a person;

in relation to that act, matter or thing.

             (2)  Malice includes ill will to the person concerned or any other improper motive.

             (3)  Neither this section nor a provision of this Act that provides as referred to in subsection (1) limits or affects any right, privilege or immunity that a person has, apart from this section or such a provision, as defendant in proceedings, or an action, for defamation.

16A  Meaning of control

             (1)  Control, of a body corporate, is:

                     (a)  having the capacity to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the body corporate; or

                     (b)  directly or indirectly holding more than one half of the issued share capital of the body corporate (not including any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital, and not including MCIs); or

                     (c)  having the capacity to control the composition of the body corporate’s board or governing body; or

                     (d)  having the capacity to determine the outcome of decisions about the body corporate’s financial and operating policies, taking into account:

                              (i)  the practical influence that can be exerted (rather than the rights that can be enforced); and

                             (ii)  any practice or pattern of behaviour affecting the body corporate’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

             (2)  Control, of a person other than a body corporate, is:

                     (a)  having the capacity to control the composition of the person’s board or governing body (if any); or

                     (b)  having the capacity to determine the outcome of decisions about the person’s financial and operating policies, taking into account:

                              (i)  the practical influence that can be exerted (rather than the rights that can be enforced); and

                             (ii)  any practice or pattern of behaviour affecting the person’s financial or operating policies (whether or not it involves a breach of an agreement or a breach of trust).

             (3)  For the purposes of paragraph (1)(b), MCI has the same meaning as in the Corporations Act 2001, and issued has the same meaning as in Chapter 7 of that Act.

Part 1‑3Application of this Act and the Transitional Act

Division 1Introduction

17  Guide to this Part

This Part deals with the application of this Act and the Transitional Act.

Division 2 is about the constitutional basis and geographical application of those Acts. It also deals with the application of those Acts to the Crown.

Division 3 deals with the interaction between those Acts and laws of the States and Territories.

Division 2Constitutional basis and application of this Act and the Transitional Act

18  Constitutional basis for this Act and the Transitional Act

Application in a referring State

             (1)  The application of this Act and the Transitional Act in the referring States is based on:

                     (a)  the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution (other than paragraph 51(xxxvii)); and

                     (b)  the legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.

Application in a Territory

             (2)  The application of this Act and the Transitional Act in a Territory is based on:

                     (a)  the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of a Territory; and

                     (b)  the legislative powers that the Commonwealth Parliament has under section 51 of the Constitution.

Despite section 2H of the Acts Interpretation Act 1901, this Act and the Transitional Act as applying in the Territory are laws of the Commonwealth.

Application outside Australia

             (3)  The operation of this Act and the Transitional Act outside Australia is based on:

                     (a)  the legislative power the Commonwealth Parliament has under paragraph 51(xxix) of the Constitution; and

                     (b)  the other legislative powers that the Commonwealth Parliament has under section 51 of the Constitution; and

                     (c)  the legislative powers that the Commonwealth Parliament has under section 122 of the Constitution to make laws for the government of a Territory.

Application in a non‑referring State

             (4)  The application of this Act and the Transitional Act in a State that is not a referring State is based on:

                     (a)  the legislative powers that the Commonwealth Parliament has under section 51 (other than paragraph 51(xxxvii)) and section 122 of the Constitution; and

                     (b)  the legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliaments of the referring States under paragraph 51(xxxvii) of the Constitution.

19  Meaning of referring State

Meaning of referring State

             (1)  A State is a referring State if, for the purposes of paragraph 51(xxxvii) of the Constitution, the Parliament of the State:

                     (a)  has referred the matters covered by subsections (3) and (4) to the Commonwealth Parliament; or

                     (b)  has:

                              (i)  adopted the relevant version of this Act and the relevant version of the Transitional Act; and

                             (ii)  referred the matter covered by subsection (4) to the Commonwealth Parliament.

             (2)  A State is a referring State even if the State’s referral law provides that:

                     (a)  the reference to the Commonwealth Parliament of a matter covered by subsection (3) or (4) is to terminate in particular circumstances; or

                     (b)  the adoption of the relevant version of this Act or the relevant version of the Transitional Act is to terminate in particular circumstances; or

                     (c)  the reference to the Commonwealth Parliament of the matter covered by subsection (4) does not include:

                              (i)  the matter of making provision with respect to the imposition or payment of State taxes, duties, charges or other imposts, however described; or

                             (ii)  the matter of making provision with respect to the general system for the recording of estates or interests in land and related information; or

                            (iii)  the matter of providing for the priority of interests in real property; or

                            (iv)  the matter of making a law that excludes or limits the operation of a State law, to the extent that the State law makes provision with respect to the creation, holding, transfer, assignment, disposal or forfeiture of a State statutory right; or

                     (d)  the reference to the Commonwealth Parliament of a matter covered by subsection (3) or (4) has effect only:

                              (i)  if and to the extent that the matter is not included in the legislative powers of the Commonwealth Parliament (otherwise than by a reference under section 51(xxxvii) of the Constitution); or

                             (ii)  if and to the extent that the matter is included in the legislative powers of the Parliament of the State.

Reference covering the relevant versions of this Act and the Transitional Act

             (3)  This subsection covers the matters to which the referred provisions relate to the extent of the making of laws with respect to those matters by including the referred provisions in the relevant version of this Act and the relevant version of the Transitional Act.

Reference covering amendments of this Act or the Transitional Act

             (4)  This subsection covers a referred credit matter (see section 20) to the extent of the making of laws with respect to that matter by making express amendments of this Act or the Transitional Act.

Effect of terminating reference or adoption of relevant versions

             (5)  A State ceases to be a referring State if:

                     (a)  in the case where the Parliament of the State has referred to the Commonwealth Parliament the matters covered by subsection (3)—that reference terminates; or

                     (b)  in the case where the Parliament of the State has adopted the relevant version of this Act and the relevant version of the Transitional Act—the adoption of the relevant version of this Act or the relevant version of the Transitional Act terminates.

Effect of terminating amendment reference

             (6)  A State ceases to be a referring State if:

                     (a)  the State’s amendment reference terminates; and

                     (b)  subsection (7) does not apply to the termination.

             (7)  A State does not cease to be a referring State because of the termination of its amendment reference if:

                     (a)  the termination is effected by the Governor of that State fixing a day by Proclamation as the day on which the reference terminates; and

                     (b)  the day fixed is no earlier than the first day after the end of the period of 6 months beginning on the day on which the Proclamation is published; and

                     (c)  that State’s amendment reference, and the amendment reference of every other State, terminates on the same day.

Definitions

             (8)  In this section:

amendment reference of a State means the reference by the Parliament of the State to the Parliament of the Commonwealth of the matter covered by subsection (4).

express amendment of this Act or the Transitional Act means the direct amendment of the text of this Act or the Transitional Act (whether by the insertion, omission, repeal, substitution or relocation of words or matter) by another Commonwealth Act or by an instrument under a Commonwealth Act, but does not include the enactment by a Commonwealth Act of a provision that has, or will have, substantive effect otherwise than as part of the text of this Act or the Transitional Act.

forfeiture means confiscation, seizure, extinguishment, cancellation, suspension or any other forfeiture.

referral law, of a State, means the Act of the State that refers the matter covered by subsection (4) to the Commonwealth Parliament.

referred provisions means:

                     (a)  the relevant version of this Act; and

                     (b)  the relevant version of the Transitional Act;

to the extent to which they deal with matters that are included in the legislative powers of the Parliaments of the States.

relevant version of the Transitional Act means the Transitional Act as originally enacted.

relevant version of this Act means:

                     (a)  if, at the time the State’s referral law was enacted, this Act had not been enacted—this Act as originally enacted; or

                     (b)  otherwise—this Act as originally enacted, and as later amended by the National Consumer Credit Protection Amendment Act 2010.

State law means:

                     (a)  any Act of the State or any instrument made under such an Act, whenever enacted or made and as in force from time to time; or

                     (b)  the general law, being the principles and rules of common law and equity to the extent that they have effect in the State from time to time.

State statutory right means a right, entitlement or authority that is granted by or under any Act of the State or any instrument made under such an Act, whenever enacted or made and as in force from time to time, other than a right, entitlement or authority that relates to:

                     (a)  credit covered by paragraph (a) of the definition of referred credit matter; or

                     (b)  a consumer lease covered by paragraph (b) of that definition.

20  Meaning of referred credit matter

             (1)  Referred credit matter means a matter relating to either of the following:

                     (a)  credit, being credit the provision of which would be covered by the expression “provision of credit to which this Code applies” in the initial National Credit Code;

                     (b)  consumer leases, being consumer leases each of which would be covered by the expression “consumer lease to which Part 11 applies” in the initial National Credit Code.

             (2)  Initial National Credit Code means Schedule 1 to the relevant version of this Act (within the meaning of subsection 19(8)).

21  General application of this Act and the Transitional Act

Application in this jurisdiction

             (1)  Each provision of this Act and the Transitional Act applies in this jurisdiction.

Geographical coverage of “this jurisdiction”

             (2)  This jurisdiction means the geographical area that consists of:

                     (a)  each referring State (including its coastal sea); and

                     (b)  each Territory (including its coastal sea).

             (3)  Throughout this Act and the Transitional Act, this jurisdiction therefore consists of either:

                     (a)  if all of the States are referring States—the whole of Australia; or

                     (b)  if one or more States are not referring States—Australia (other than any State that is not a referring State).

Application outside this jurisdiction

             (4)  Subject to subsection (5), each provision of this Act and the Transitional Act also applies, according to its tenor, in relation to acts and omissions outside this jurisdiction.

Application in non‑referring States

             (5)  This Act does not apply to an act or omission in a State that is not a referring State to the extent to which that application would be beyond the legislative powers of the Parliament (including powers it has under paragraphs 51(xxxvii) and (xxxix) of the Constitution).

Residence, place of formation etc.

             (6)  Each provision of this Act and the Transitional Act applies, according to its tenor, to:

                     (a)  natural persons whether:

                              (i)  resident in this jurisdiction or not; and

                             (ii)  resident in Australia or not; and

                            (iii)  Australian citizens or not; and

                     (b)  all bodies corporate and unincorporated bodies whether:

                              (i)  formed or carrying on a business in this jurisdiction or not; and

                             (ii)  formed or carrying on a business in Australia or not.

22  When Acts bind Crown

             (1)  This Act (other than the National Credit Code) and the Transitional Act do not bind the Crown in any of its capacities.

             (2)  Despite subsection (1), the regulations may provide that this Act (other than the National Credit Code) and the Transitional Act, or specified provisions of this Act (other than the National Credit Code) or the Transitional Act, bind either or both of the following in circumstances (if any) prescribed by the regulations:

                     (a)  the Crown in right of the Commonwealth;

                     (b)  the Crown in all of its other capacities.

             (3)  The National Credit Code binds the Crown in each of its capacities.

             (4)  This Act and the Transitional Act do not make the Crown liable to be prosecuted for an offence or to any pecuniary penalty.

Division 3Interaction between the Commonwealth credit legislation and State and Territory laws

23  Concurrent operation intended

             (1)  This Act and the Transitional Act (the Commonwealth credit legislation) are not intended to exclude or limit the concurrent operation of any law of a State or Territory.

             (2)  If:

                     (a)  an act or omission of a person is both an offence against the Commonwealth credit legislation and an offence against the law of a State or Territory; and

                     (b)  the person is convicted of either of those offences;

the person is not liable to be convicted of the other of those offences.

             (3)  This section does not apply to a law of a State or Territory if there is a direct inconsistency between that law and the Commonwealth credit legislation.

Note:          Section 25 avoids direct inconsistency arising in some cases by limiting the operation of the Commonwealth credit legislation.

24  When Commonwealth credit legislation does not apply

             (1)  Subsection (2) applies if a provision of a law of a referring State or a Territory declares a matter to be an excluded matter for the purposes of this section in relation to:

                     (a)  the whole of the Commonwealth credit legislation; or

                     (b)  a specified provision of the Commonwealth credit legislation; or

                     (c)  the Commonwealth credit legislation other than a specified provision; or

                     (d)  the Commonwealth credit legislation otherwise than to a specified extent.

             (2)  By force of this subsection:

                     (a)  none of the provisions of the Commonwealth credit legislation (other than this section) applies in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(a) applies; and

                     (b)  the specified provision of the Commonwealth credit legislation does not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(b) applies; and

                     (c)  the provisions of the Commonwealth credit legislation (other than this section and the specified provisions) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(c) applies; and

                     (d)  the provisions of the Commonwealth credit legislation (other than this section and otherwise than to the specified extent) do not apply in or in relation to the State or Territory with respect to the matter if the declaration is one to which paragraph (1)(d) applies.

             (3)  Subsection (2) does not apply to the declaration to the extent to which the regulations provide that that subsection does not apply to that declaration.

25  Avoiding direct inconsistency between Commonwealth and State and Territory laws

This section overrides other Commonwealth credit legislation

             (1)  This section has effect despite anything else in the Commonwealth credit legislation.

When this section does not apply to a State or Territory law

             (2)  This section does not apply to a provision of a law of a referring State or a Territory that is capable of concurrent operation with the Commonwealth credit legislation.

Note:          This kind of provision is dealt with by section 23.

When this section applies to a State or Territory law

             (3)  This section applies to the interaction between a provision (the displacement provision) of a law of a referring State or a Territory and a provision (the Commonwealth provision) of the Commonwealth credit legislation only if the displacement provision is declared by a law of the State or Territory to be a Commonwealth credit legislation displacement provision for the purposes of this section (either generally or specifically in relation to the Commonwealth provision).

Effect of displacement provision

             (4)  The Commonwealth provision does not:

                     (a)  prohibit the doing of an act; or

                     (b)  impose a liability (whether civil or criminal) for doing an act;

if the displacement provision specifically permits, authorises or requires the doing of that act.

             (5)  The Commonwealth provision does not operate in or in relation to the State or Territory to the extent necessary to ensure that no inconsistency arises between:

                     (a)  the Commonwealth provision; and

                     (b)  the displacement provision to the extent to which the displacement provision would, apart from this subsection, be inconsistent with the Commonwealth provision.

Note 1:       The displacement provision is not covered by this subsection if subsection (4) applies to the displacement provision: if that subsection applies there would be no potential inconsistency to be dealt with by this subsection.

Note 2:       The operation of the displacement provision will be supported by section 23 to the extent to which it can operate concurrently with the Commonwealth provision.

             (6)  Subsections (4) and (5) do not apply in relation to the displacement provision to the extent to which the regulations provide that those subsections do not apply in relation to the displacement provision.

26  Regulations to deal with interaction between laws

             (1)  The regulations may modify the operation of the Commonwealth credit legislation so that:

                     (a)  provisions of the Commonwealth credit legislation do not apply to a matter that is dealt with by a law of a referring State or a Territory specified in the regulations; or

                     (b)  no inconsistency arises between the operation of a provision of the Commonwealth credit legislation and the operation of a provision of a law of a referring State or a Territory specified in the regulations.

             (2)  Without limiting subsection (1), regulations made for the purposes of that subsection may provide that a provision of the Commonwealth credit legislation:

                     (a)  does not apply to:

                              (i)  a person specified in the regulations; or

                             (ii)  a body specified in the regulations; or

                            (iii)  circumstances specified in the regulations; or

                            (iv)  a person or body specified in the regulations in the circumstances specified in the regulations; or

                     (b)  does not prohibit an act to the extent to which the prohibition would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

                     (c)  does not require a person to do an act to the extent to which the requirement would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

                     (d)  does not authorise a person to do an act to the extent to which the conferral of that authority on the person would otherwise give rise to an inconsistency with a law of a referring State or a Territory; or

                     (e)  does not impose an obligation on a person to the extent to which complying with that obligation would require the person not to comply with an obligation imposed on the person under a law of a referring State or a Territory; or

                      (f)  authorises a person to do something for the purposes of the Commonwealth credit legislation that the person:

                              (i)  is authorised to do under a law of a referring State or a Territory; and

                             (ii)  would not otherwise be authorised to do under the Commonwealth credit legislation; or

                     (g)  will be taken to be satisfied if a law of a referring State or a Territory is satisfied.

Chapter 2Licensing of persons who engage in credit activities

Part 2‑1Requirement to be licensed to engage in credit activities

Division 1Introduction

27  Guide to this Part

This Part is about the licensing of persons to engage in credit activities. In general, a person cannot engage in a credit activity if the person does not hold an Australian credit licence.

Division 2 prohibits a person from engaging in credit activities without an Australian credit licence. However, the prohibition does not apply to employees and directors of licensees or related bodies corporate of licensees, or to credit representatives of licensees.

Division 3 deals with other prohibitions relating to the requirement to be licensed and to credit activities. These prohibitions relate to holding out and advertising, conducting business with unlicensed persons, and charging fees for unlicensed conduct.

Division 2Engaging in credit activities without a licence

28  Application of this Division

                   This Division applies on or after 1 July 2011, or a later day prescribed by the regulations.

29  Prohibition on engaging in credit activities without a licence

Prohibition on engaging in credit activities without a licence

             (1)  A person must not engage in a credit activity if the person does not hold a licence authorising the person to engage in the credit activity.

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    2 years imprisonment.

Defences

             (3)  For the purposes of subsections (1) and (2), it is a defence if:

                     (a)  the person engages in the credit activity on behalf of another person (the principal); and

                     (b)  the person is:

                              (i)  an employee or director of the principal or of a related body corporate of the principal; or

                             (ii)  a credit representative of the principal; and

                     (c)  the person’s conduct in engaging in the credit activity is within the authority of the principal; and

                     (d)  the principal holds a licence authorising the principal to engage in the credit activity.

Note:          For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (3) (see subsection 13.3(3) of the Criminal Code).

             (4)  For the purposes of subsections (1) and (2), it is a defence if:

                     (a)  the person engages in the credit activity on behalf of another person (the principal); and

                     (b)  the person is a representative of the principal; and

                     (c)  the person’s conduct in engaging in the credit activity is within the authority of the principal; and

                     (d)  the principal is exempted from subsections (1) and (2) under paragraph 109(1)(a), 109(3)(a) or 110(1)(a).

Note:          For the purposes of subsection (2), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

Division 3Other prohibitions relating to the requirement to be licensed

30  Prohibitions on holding out and advertising etc.

Prohibitions on holding out and advertising etc.

             (1)  A person must not hold out:

                     (a)  that the person holds a licence; or

                     (b)  that the person holds a licence authorising the person to engage in a particular credit activity; or

                     (c)  that a credit activity engaged in by the person or by someone else is exempt from a requirement to hold a licence; or

                     (d)  that, in engaging in a credit activity, the person acts on behalf of another person; or

                     (e)  that conduct, or proposed conduct, of the person is within the authority of a licensee;

if that is not the case.

Civil penalty:          5,000 penalty units.

             (2)  A person must not hold out or advertise that the person engages or is able to engage in a credit activity if the person would, if the person engaged in the credit activity, contravene section 29 (which deals with the requirement to be licensed).

Civil penalty:          5,000 penalty units.

Offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1) or (2); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    1 year imprisonment.

31  Prohibition on conducting business with unlicensed persons

Prohibition on conducting business with unlicensed persons

             (1)  A licensee must not:

                     (a)  engage in a credit activity; and

                     (b)  in the course of engaging in that credit activity, conduct business with another person who is engaging in a credit activity;

if, by engaging in the credit activity, the other person contravenes section 29 (which deals with the requirement to be licensed).

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    2 years imprisonment.

32  Prohibition on charging a fee etc.

Prohibition on charging a fee etc.

             (1)  A person must not demand, receive or accept any fee, charge or other amount from a consumer for engaging in a credit activity if, by engaging in that credit activity, the person contravenes, or would contravene, section 29 (which deals with the requirement to be licensed).

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    1 year imprisonment.

Part 2‑2Australian credit licences

Division 1Introduction

34  Guide to this Part

This Part is about Australian credit licences.

Division 2 explains what an Australian credit licence is and the credit activities that are authorised by it.

Division 3 is about how to get an Australian credit licence, including how to apply for it and when ASIC may grant or refuse to grant it.

Division 4 is about the conditions that may be imposed on an Australian credit licence.

Division 5 is about conduct obligations of licensees.

Division 6 is about the suspension, cancellation or variation of an Australian credit licence.

Division 2Australian credit licences

35  Australian credit licences

             (1)  An Australian credit licence is a licence that authorises the licensee to engage in particular credit activities.

             (2)  The credit activities that the licensee is authorised to engage in are those credit activities specified in a condition of the licence as the credit activities that the licensee is authorised to engage in.

Division 3How to get an Australian credit licence

36  Applying for a licence

             (1)  A person may apply for a licence by lodging an application with ASIC on or after 1 July 2010, or a later day prescribed by the regulations.

             (2)  The application must be in the approved form.

37  When a licence may be granted—applicants other than ADIs

When ASIC must grant a licence

             (1)  ASIC must grant a person (other than an ADI) a licence if (and must not grant the person a licence unless):

                     (a)  the person has applied for the licence in accordance with section 36; and

                     (b)  ASIC has no reason to believe that the person is likely to contravene the obligations that will apply under section 47 if the licence is granted; and

                     (c)  the requirement in section 37A (fit and proper person test) is satisfied in relation to the applicant and the licence applied for; and

                     (e)  the person meets any other requirements prescribed by the regulations.

Note:          ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).

False, misleading or incomplete information

             (2)  ASIC must refuse to grant the licence if ASIC is satisfied that:

                     (a)  the application for the licence, or any information, audit report or statement lodged with ASIC in accordance with subsection (4), was false in a material particular or materially misleading; or

                     (b)  there was an omission of a material matter from the application or the information, audit report or statement.

ASIC may request information etc. from applicant

             (4)  ASIC may give a written notice to a person who has applied for a licence requesting the person to lodge with ASIC, within the time specified in the notice, any of the following:

                     (a)  information specified in the notice in relation to any matters that ASIC may have regard to in deciding whether to grant the licence;

                     (b)  an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC may have regard to in deciding whether to grant the licence;

                     (c)  if ASIC proposes to grant the applicant a licence—a statement that either:

                              (i)  informs ASIC of any material changes in any information provided to ASIC in, or in connection with, the application; or

                             (ii)  confirms that there have been no such changes.

             (5)  To avoid doubt:

                     (a)  a notice under subsection (4), and the information, audit report or statement requested in the notice, may relate to any person mentioned in section 37A in relation to the applicant and the licence applied for; and

                     (b)  subsection (7) applies in relation to such a request even if the applicant is unable to comply with the request.

             (6)  ASIC may, by written notice to the applicant before the time specified in the notice:

                     (a)  withdraw a request under subsection (4); or

                     (b)  extend the time specified in the notice.

             (7)  If the applicant does not lodge with ASIC the information, audit report or statement requested by ASIC in a notice under subsection (4) within the specified time, the applicant is taken to have withdrawn the application.

             (8)  To avoid doubt, section 41 does not apply to an application that is taken to have been withdrawn under subsection (7) of this section.

37A  Fit and proper person test

             (1)  For the purposes of paragraph 37(1)(c), subsection 46A(2) and paragraph 55(1)(c), the requirement in this section is satisfied in relation to a person (the first person) and a licence, or a proposed licence, if ASIC is satisfied that there is no reason to believe any of the following:

                     (a)  that the first person is not a fit and proper person to engage in the credit activities authorised by the licence;

                     (b)  if the first person is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the first person is not a fit and proper person to perform one or more functions as an officer of a person that engages in the credit activities authorised by the licence;

                     (c)  if the first person is a partnership or the multiple trustees of a trust:

                              (i)  that any of the partners or trustees are not fit and proper persons to engage in the credit activities authorised by the licence; or

                             (ii)  that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of a person that engages in the credit activities authorised by the licence;

                     (d)  that any person who controls the first person is not a fit and proper person to control a person that engages in the credit activities authorised by the licence;

                     (e)  if a controller mentioned in paragraph (d) is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the controller is not a fit and proper person to perform one or more functions as an officer of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence;

                      (f)  if a controller mentioned in paragraph (d) is a partnership or the multiple trustees of a trust:

                              (i)  that any of the partners or trustees are not fit and proper persons to control a person that engages in the credit activities authorised by the licence; or

                             (ii)  that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence.

             (2)  In considering whether a person is fit and proper for a purpose mentioned in subsection (1), ASIC must have regard to the matters in section 37B.

37B  Fit and proper person test—matters to which ASIC must have regard

             (1)  ASIC must have regard to the matters set out in subsection (2) (subject to Part VIIC of the Crimes Act 1914) for the purposes of applying any of the following provisions to a person:

                     (a)  a paragraph of subsection 37A(1);

                     (b)  paragraph 80(1)(f).

Note:          Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.

             (2)  The matters are as follows:

                     (a)  whether any of the following of the person has ever been suspended or cancelled:

                              (i)  a licence, or a registration under the Transitional Act;

                             (ii)  an Australian financial services licence;

                     (b)  whether any of the following has ever been made against the person:

                              (i)  a banning order, or a disqualification order under Part 2‑4;

                             (ii)  a banning order, or a disqualification order, under Division 8 of Part 7.6 of the Corporations Act 2001;

                     (c)  if the person is an individual—whether the person has ever been disqualified under the Corporations Act 2001, or any other law of the Commonwealth or of a State or Territory, from managing corporations;

                     (d)  whether the person has ever been banned from engaging in a credit activity under a law of a State or Territory;

                     (e)  whether the person has ever been linked to a refusal or failure to give effect to a determination made by AFCA (as defined in section 910C of the Corporations Act 2001);

                      (f)  if the person is not the multiple trustees of a trust—whether the person has ever been insolvent;

                     (g)  if the person is the multiple trustees of a trust—whether a trustee of the trust has ever been insolvent;

                     (h)  whether, in the last 10 years, the person has been convicted of an offence;

                      (i)  any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;

                      (j)  any other matter prescribed by the regulations;

                     (k)  any other matter ASIC considers relevant.

38  When a licence may be granted—ADIs

                   If:

                     (a)  an ADI applies under section 36 for a licence; and

                     (b)  the application includes a statement (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee;

then ASIC must grant the ADI a licence authorising the ADI to engage in credit activities that equate (as closely as possible) to the credit activities in relation to which the application was made.

Note:          ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).

39  Regulations may prescribe streamlined process for other applicants

                   Despite sections 36 and 37, the regulations may provide that:

                     (a)  some or all of sections 36 and 37 do not apply in relation to particular classes of applicants; and

                     (b)  alternative processes apply to applications for licences by, and the grant of licences to, those classes of applicants.

40  Licences must not be granted to certain applicants

Banning or disqualification order in force against person

             (1)  Despite subsection 37(1) and section 38, ASIC must not grant a licence that authorises a person to engage in a credit activity if a banning order or disqualification order under Part 2‑4 is in force against the person in relation to that credit activity.

Prescribed State or Territory order in force against person etc.

             (2)  Despite subsection 37(1) and section 38, ASIC must not grant a licence to a person if:

                     (a)  the person is a natural person against whom a prescribed State or Territory order is in force; or

                     (b)  the person is a body corporate, and a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities to be authorised by the licence; or

                     (c)  the person is a partnership or the trustees of a trust, and a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence.

41  Applicant must be given hearing before refusal of licence

                   ASIC may only refuse to grant a licence after giving the person who applied for the licence an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC in relation to the refusal.

42  Notice of grant or refusal of licence and date of effect

             (1)  ASIC must give a person (the applicant) who has applied for a licence written notice of:

                     (a)  ASIC’s decision on the application; and

                     (b)  if the decision is to grant the applicant a licence—the day on which the licence takes effect; and

                     (c)  if the decision is not to grant the applicant a licence—the reasons for the decision.

             (2)  The licence comes into force on the day specified in the notice, which must not be before the day on which the decision to grant the licence was made.

43  Australian credit licence numbers

             (1)  ASIC must allocate each licence a unique Australian credit licence number when it is granted.

             (2)  If:

                     (a)  a person is granted a licence; and

                     (b)  the person holds an Australian financial services licence;

then the Australian credit licence number that ASIC gives to the licence held by that person must be the same number as the person’s Australian financial services licence number.

             (3)  ASIC must give the licensee written notice of the Australian credit licence number.

44  Basis on which licence is granted

                   A licence granted under this Division is granted on the basis that:

                     (a)  conditions on the licence may be imposed, varied or revoked under section 45 or 46; and

                     (b)  the licence may be suspended under section 54, 55 or 56; and

                     (c)  the licence may be cancelled under section 54, 55 or 56; and

                     (d)  the licence may be varied under section 57; and

                     (e)  the licence may be cancelled, revoked, terminated or varied by or under later legislation; and

                      (f)  no compensation is payable if:

                              (i)  conditions on the licence are imposed, varied or revoked as referred to in paragraph (a); or

                             (ii)  the licence is suspended, cancelled, varied, revoked or terminated as referred to in paragraphs (b) to (e).

Division 4Conditions on an Australian credit licence

45  The conditions on the licence

ASIC may impose, vary or revoke conditions on licences

             (1)  Subject to section 46A, ASIC may, at any time:

                     (a)  impose conditions, or additional conditions, on a licence; and

                     (b)  vary or revoke conditions imposed on a licence.

             (2)  ASIC may do so:

                     (a)  on its own initiative; or

                     (b)  if the licensee lodges an application with ASIC for the imposition, variation or revocation.

             (3)  The application must be in the approved form.

Notice and effect of imposition, variation or revocation of conditions

             (4)  ASIC must give the licensee written notice of the imposition, variation or revocation of the conditions. The imposition, variation or revocation of the conditions comes into force on the day specified in the notice, which must not be before the day on which the decision to impose, vary or revoke the conditions was made.

ASIC must give the licensee a hearing

             (5)  Despite subsection (1), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the licence after giving the licensee an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC in relation to the conditions.

This subsection does not apply to ASIC imposing conditions when the licence is granted, or imposing or varying conditions in accordance with an application under paragraph (2)(b).

Condition in relation to credit activities authorised

             (6)  ASIC must ensure that the licence is subject to a condition that specifies the credit activities or classes of credit activities that the licensee is authorised to engage in.

Regulations may prescribe conditions

             (7)  The licence is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.

46  Licence conditions—special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

             (1)  If the licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:

                     (a)  ASIC cannot:

                              (i)  impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities); or

                             (ii)  vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

                            unless ASIC has first consulted APRA about the proposed action;

                     (b)  if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

             (2)  If the licensee, or a related body corporate, is an ADI, then the following provisions apply:

                     (a)  subject to paragraphs (b) and (c), the powers that ASIC would otherwise have under section 45:

                              (i)  to impose, vary or revoke a condition on the licence that, in ASIC’s opinion, has or would have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959); or

                             (ii)  to vary a condition so that it would, in ASIC’s opinion, become a condition that would have a result as described in subparagraph (i);

                            are instead powers of the Minister;

                     (b)  the following provisions apply in relation to a power to which paragraph (a) applies:

                              (i)  the procedures for the exercise of the power are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

                             (ii)  ASIC (rather than the Minister) must still conduct any hearing required under paragraph 45(5)(a) and receive any submissions under paragraph 45(5)(b);

                     (c)  if ASIC imposes, varies or revokes a condition on the licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

46A  ASIC may request information etc. in relation to an application for conditions to be varied

             (1)  This section applies if a licensee applies under paragraph 45(2)(b) for ASIC to:

                     (a)  impose conditions, or additional conditions, on the licence; or

                     (b)  vary or revoke conditions imposed on the licence.

However, this section does not apply in relation to a power to which paragraph 46(2)(a) applies.

             (2)  ASIC must not grant the application unless the requirement in section 37A (fit and proper person test) is satisfied in relation to the applicant and the licence as proposed to be varied.

ASIC may request information etc. from applicant

             (3)  ASIC may give a written notice to the applicant requesting the applicant to lodge with ASIC, within the time specified in the notice, any of the following:

                     (a)  information specified in the notice in relation to any matters that ASIC must have regard to for the purposes of deciding whether the requirement in section 37A is satisfied as mentioned in subsection (2) of this section;

                     (b)  an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC must have regard to for the purposes of deciding whether the requirement in section 37A is satisfied as mentioned in subsection (2) of this section;

                     (c)  if ASIC proposes to grant the application—a statement that either:

                              (i)  informs ASIC of any material changes in any information provided to ASIC in, or in connection with, the application; or

                             (ii)  confirms that there have been no such changes.

             (4)  To avoid doubt:

                     (a)  a notice under subsection (3), and the information, audit report or statement requested in the notice, may relate to any person mentioned in section 37A in relation to the applicant and the licence as proposed to be varied; and

                     (b)  subsection (6) applies in relation to such a request even if the applicant is unable to comply with the request.

             (5)  ASIC may, by written notice to the applicant within the time specified in the notice:

                     (a)  withdraw the request; or

                     (b)  extend the time specified in the notice.

             (6)  If the applicant does not lodge with ASIC the information, audit report or statement requested by ASIC in a notice under subsection (3) within the specified time, the applicant is taken to have withdrawn the application.

             (7)  To avoid doubt, subsection (8) does not apply to an application that is taken to have been withdrawn under subsection (6).

Applicant must be given hearing before refusal of application

             (8)  ASIC may only refuse to grant the application after giving the applicant an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC in relation to the matter.

Division 5Obligations of licensees

47  General conduct obligations of licensees

General 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

                      (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 (within the meaning of Chapter 7 of that Act); 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

                     (b)  approvals given by ASIC.

Civil penalty for non‑compliance

             (4)  The licensee must not contravene paragraph (1)(a), (b), (e), (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.

48  Requirements for compensation arrangements

Requirement to have adequate compensation arrangements

             (1)  A licensee must have adequate arrangements for compensating persons for loss or damage suffered because of a contravention of this Act by the licensee or its representatives.

When arrangements are adequate

             (2)  For the purposes of subsection (1), arrangements are adequate if, and only if, they:

                     (a)  satisfy any requirements prescribed by the regulations; or

                     (b)  are approved in writing by ASIC.

Approval of arrangements by ASIC

             (3)  Before approving arrangements under paragraph (2)(b), ASIC must have regard to:

                     (a)  the credit activities authorised by the licence; and

                     (b)  whether the arrangements will continue to cover persons after the licensee ceases to engage in credit activities, and the length of time for which that cover will continue; and

                     (c)  any other matters that are prescribed by the regulations.

             (4)  Without limiting paragraph (3)(c), the regulations may, in particular, prescribe additional details in relation to the matters to which ASIC must have regard under paragraphs (3)(a) and (b).

49  Obligation to provide a statement or obtain an audit report if directed by ASIC

Notice to licensee to provide a statement

             (1)  ASIC may give a licensee a written notice directing the licensee to lodge with ASIC a written statement containing specified information about:

                     (a)  the credit activities engaged in by the licensee or its representatives; or

                     (b)  for the purposes of considering whether the requirement in section 37A (fit and proper person test) is satisfied in relation to the licensee and the licence—any matters mentioned in section 37B in relation to a person mentioned in a paragraph of subsection 37A(1).

             (2)  Notices under subsection (1):

                     (a)  may be given at any time; and

                     (b)  may be given to one or more particular licensees, or to each licensee in one or more classes of licensee, or to all licensees; and

                     (c)  may require all the same information, or may contain differences as to the information they require; and

                     (d)  may require a statement containing information to be given on a periodic basis, or each time a particular event or circumstance occurs, without ASIC having to give a further written notice.

Notice to licensee to obtain an audit report

             (3)  ASIC may also give a licensee a written notice directing the licensee to obtain an audit report, prepared by a suitably qualified person specified in the notice, on a statement, or on each statement in a class of statements, under subsection (1) before the statement is given to ASIC.

             (4)  A notice under subsection (3) is not a legislative instrument.

Notice must specify day by which licensee must comply

             (5)  A notice given under this section must specify the day by which the licensee must comply with the notice (which must be a reasonable period after the notice is given). ASIC may extend the day by giving a written notice to the licensee.

Requirement to comply with notice

             (6)  The licensee must comply with a notice given under this section within the time specified in the notice.

Civil penalty:          5,000 penalty units.

Offence

             (7)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (6); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

Strict liability offence

             (8)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (6); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    20 penalty units.

             (9)  Subsection (8) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

50  Obligation to give ASIC information required by the regulations

Regulations may require licensee to give information

             (1)  The regulations may require a licensee, or each licensee in a class of licensees, to give ASIC specified information about the credit activities engaged in by the licensee or its representatives.

Requirement to comply with regulations

             (2)  If regulations under subsection (1) require a licensee to give ASIC information, the licensee must give ASIC that information.

Civil penalty:          5,000 penalty units.

Offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement to give ASIC information under subsection (2); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

Strict liability offence

             (4)  A person commits an offence if:

                     (a)  the person is subject to a requirement to give ASIC information under subsection (2); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    20 penalty units.

             (5)  Subsection (4) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

51  Obligation to provide ASIC with assistance if reasonably requested

Requirement to provide assistance

             (1)  If ASIC, or a person authorised by ASIC, reasonably requests assistance from a licensee in relation to whether the licensee and its representatives are complying with the credit legislation, the licensee must give ASIC or the authorised person the requested assistance.

Civil penalty:          5,000 penalty units.

             (2)  If the request is in writing, it is not a legislative instrument.

Offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement to give ASIC or an authorised person assistance under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

Assistance may include showing ASIC credit books etc.

             (4)  The assistance referred to in subsection (1) may include showing ASIC the person’s credit books or giving ASIC other information.

52  Obligation to cite Australian credit licence number

When this section applies

             (1)  This section applies on or after the day that is 2 years after the day section 3 commences.

Requirement to include licence number in documents

             (2)  Whenever a licensee identifies itself in a document of a kind prescribed by the regulations, the licensee must:

                     (a)  include in the document the licensee’s Australian credit licence number; and

                     (b)  identify in the document that the number is the licensee’s Australian credit licence number.

Civil penalty:          5,000 penalty units.

Strict liability offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (2) to include and identify its Australian credit licence number in a document; and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    20 penalty units.

             (4)  Subsection (3) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

53  Obligation to lodge annual compliance certificate

Requirement to lodge annual compliance certificate

             (1)  A licensee must, no later than 45 days after the licensee’s licensing anniversary in each year, lodge a compliance certificate with ASIC in accordance with this section. ASIC may extend the day by giving a written notice to the licensee.

Civil penalty:          5,000 penalty units.

Compliance certificate must be in approved form

             (2)  The compliance certificate must be in the approved form.

Who must sign compliance certificate

             (3)  The compliance certificate must be signed by:

                     (a)  if the licensee is a single natural person—the licensee; or

                     (b)  if the licensee is a body corporate—a person of a kind prescribed by the regulations; or

                     (c)  if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to credit activities.

Requirement to ensure compliance certificate is lodged

             (4)  Each person by whom the compliance certificate may be signed under subsection (3) must ensure that the licensee lodges the compliance certificate with ASIC in accordance with this section.

Civil penalty:          5,000 penalty units.

Strict liability offence

             (5)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1) or (4); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    60 penalty units.

             (6)  Subsection (5) is an offence of strict liability.

Meaning of licensing anniversary

             (7)  Licensing anniversary of a licensee means the anniversary of the day on which the licensee’s licence came into force under section 42.

53A  Obligation to notify ASIC of change in control

Requirement to notify ASIC of change in control

             (1)  If an entity (as defined by section 64A of the Corporations Act 2001) starts to control, or stops controlling, a licensee, the licensee must lodge a notification with ASIC:

                     (a)  in the approved form; and

                     (b)  before the end of 30 business days after the day the entity starts to control, or stops controlling, the licensee.

Strict liability offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1) to lodge a notification with ASIC; and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    30 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

53B  Obligation to notify ASIC if licensee does not engage in credit activities

Requirement to notify ASIC if licensee does not engage in credit activities

             (1)  If a licensee does not engage in the credit activities authorised by the licence before the end of 6 months after the licence is granted, the licensee must lodge a notification with ASIC:

                     (a)  in the approved form; and

                     (b)  before the end of 15 business days after the end of the 6 months.

Strict liability offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1) to lodge a notification with ASIC; and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    30 penalty units.

             (3)  Subsection (2) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

Division 6When a licence can be suspended, cancelled or varied

Subdivision ASuspensions and cancellations

54  Suspension or cancellation without hearing

             (1)  ASIC may suspend or cancel a licensee’s licence if:

                     (a)  the licensee lodges with ASIC an application for the suspension or cancellation; or

                     (b)  the licensee ceases to engage in credit activities; or

                     (c)  any of the matters set out in subsection (2) applies to any of the following persons:

                              (i)  the licensee;

                             (ii)  if the licensee is a body corporate—a director, secretary or senior manager of the body corporate;

                            (iii)  if the licensee is a partnership or the trustees of a trust—a partner or trustee; or

                     (d)  in the case of a licensee that is a leviable entity (within the meaning of the ASIC Supervisory Cost Recovery Levy Act 2017)—the following have not been paid in full at least 12 months after the due date for payment:

                              (i)  an amount of levy (if any) payable in respect of the licensee;

                             (ii)  an amount of late payment penalty payable (if any) in relation to the levy;

                            (iii)  an amount of shortfall penalty payable (if any) in relation to the levy.

          (1A)  ASIC may cancel a licensee’s licence if the licensee does not engage in the credit activities authorised by the licence before the end of 6 months after the licence is granted.

             (2)  For the purposes of paragraph (1)(c), the matters are as follows:

                     (a)  if the person is not the trustees of a trust—the person is insolvent;

                     (b)  if the person is a natural person:

                              (i)  the person is convicted of serious fraud; or

                             (ii)  the person is incapable of managing his or her affairs because of physical or mental incapacity; or

                            (iii)  a prescribed State or Territory order is in force against the person.

             (3)  An application for suspension or cancellation of a licence must be in the approved form.

55  Suspension or cancellation after offering a hearing

             (1)  ASIC may suspend or cancel a licensee’s licence (subject to complying with subsection (4)) if:

                     (a)  the licensee has contravened an obligation under section 47 (which deals with general conduct obligations of licensees); or

                     (b)  ASIC has reason to believe that the licensee is likely to contravene an obligation under that section; or

                     (c)  the requirement in section 37A (fit and proper person test) is not satisfied in relation to the licensee and the licence; or

                     (d)  the application for the licence:

                              (i)  was false in a material particular or materially misleading; or

                             (ii)  omitted a material matter; or

                     (e)  any information, audit report or statement lodged with ASIC in accordance with a request under subsection 37(4) in relation to the application for the licence:

                              (i)  was false in a material particular or materially misleading; or

                             (ii)  omitted a material matter; or

                      (f)  an application made by the licensee under paragraph 45(2)(b) in relation to the licence:

                              (i)  was false in a material particular or materially misleading; or

                             (ii)  omitted a material matter; or

                     (g)  any information, audit report or statement lodged with ASIC in accordance with a request under subsection 46A(3) in relation to an application made by the licensee under paragraph 45(2)(b) in relation to the licence:

                              (i)  was false in a material particular or materially misleading; or

                             (ii)  omitted a material matter.

             (4)  ASIC may only suspend or cancel a licensee’s licence under this section after giving the licensee an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC on the matter.

56  Suspension and cancellation—special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

             (1)  If a licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply:

                     (a)  ASIC cannot suspend or cancel the licensee’s licence if doing so would, in ASIC’s opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;

                     (b)  if ASIC suspends or cancels the licensee’s licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

             (2)  If:

                     (a)  a licensee is an ADI; or

                     (b)  a related body corporate of a licensee is an ADI, and cancellation or suspension of the licensee’s licence would, in ASIC’s opinion, have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959);

then the following provisions have effect:

                     (c)  subject to paragraph (d), the powers that ASIC would otherwise have under this Division to cancel or suspend the licensee’s licence, or to revoke a suspension to which this subsection applied, are instead powers of the Minister;

                     (d)  the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

                     (e)  ASIC (rather than the Minister) must still conduct any hearing required under paragraph 55(4)(a) and receive any submissions under paragraph 55(4)(b).

Subdivision BVariations

57  Varying licences

                   ASIC may vary a person’s licence to take account of a change in the person’s name.

Note:          The conditions on the licence can be varied under section 45.

Subdivision CMiscellaneous rules about suspensions, cancellations and variations

58  Effect of suspension

             (1)  A suspended licence has no effect while it remains suspended.

             (2)  Subsection (1) has effect subject to section 62 (which deals with the continued effect of some suspended or cancelled licences).

59  Revocation of suspension

                   ASIC may at any time revoke the suspension of a licence.

60  Date of effect, notice and publication of variation, cancellation or suspension etc.

             (1)  ASIC must give a licensee written notice of a variation, suspension, revocation of a suspension, or cancellation of the licensee’s licence.

             (2)  A variation, suspension, revocation of a suspension, or cancellation of a licence comes into force when the written notice of that action is given to the licensee.

             (3)  As soon as practicable after the notice is given to the licensee, ASIC must publish a notice of the action on ASIC’s website. The notice must state when the action took effect.

61  Statement of reasons

                   A notice of suspension or cancellation given to a licensee must be accompanied by a statement of reasons for the action taken.

62  ASIC may allow licence to continue in force

             (1)  If ASIC gives a written notice of suspension or cancellation to a licensee, ASIC may include terms in the notice specifying that the licence continues in force as though the suspension or cancellation had not happened for the purposes of specified provisions of this Act in relation to specified matters, a specified period, or both.

             (2)  If ASIC includes terms in a notice under subsection (1), the licence continues in force in accordance with the terms of the notice.

Part 2‑3Credit representatives and other representatives of licensees

Division 1Introduction

63  Guide to this Part

This Part is about credit representatives of licensees (which are a particular type of representative of licensees). A person who is authorised as a credit representative of a licensee does not need to hold an Australian credit licence when engaging in credit activities on behalf of the licensee.

This Part also deals with information that ASIC may give to licensees about their representatives (such as their employees, directors and credit representatives, and persons who act on their behalf), and the liability of licensees for their representatives.

Division 2 deals with how a credit representative may be authorised to engage in credit activities on behalf of a licensee. It also deals with certain obligations of licensees in relation to the authorisation of their credit representatives.

Division 3 deals with information about representatives that ASIC may give to a licensee and the use of that information.

Division 4 deals with the liability of licensees for the conduct of their representatives.

Division 2Authorisation of credit representatives

64  Licensee may authorise credit representatives

Authorisation of credit representative by licensee

             (1)  A licensee may give a person a written notice authorising the person to engage in specified credit activities on behalf of the licensee.

             (2)  A person who is authorised under subsection (1) is a credit representative of the relevant licensee.

             (3)  The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.

When authorisation is of no effect

             (4)  The authorisation:

                     (a)  is of no effect if subsection (5) applies to it when it is given; and

                     (b)  ceases to have effect if and when subsection (5) starts to apply to it after it is given;

to the extent that subsection (5) applies.

             (5)  This section applies to the authorisation to the extent that it purports to authorise:

                     (a)  a person to engage in a credit activity that is not authorised by the licensee’s licence; or

                     (b)  a person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the person in relation to the credit activity; or

                     (c)  a person who is not a member of the AFCA scheme; or

                     (d)  a person who is banned from engaging in a credit activity under a law of a State or Territory; or

                     (e)  a natural person who has been convicted, within the last 10 years, of serious fraud; or

                      (f)  a natural person against whom a prescribed State or Territory order is in force; or

                     (g)  a person that is a body corporate, if a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities specified in the authorisation; or

                     (h)  a person that is a partnership or the trustees of a trust, if a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities specified in the authorisation.

65  Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives

Authorisation of natural person as credit representative by credit representative that is a body corporate

             (1)  A body corporate that is a credit representative of a licensee may, in that capacity, give a natural person a written notice authorising that natural person to engage in specified credit activities on behalf of the licensee.

             (2)  A natural person who is authorised under subsection (1) is a credit representative of the relevant licensee.

             (3)  The credit activities specified may be some or all of the credit activities authorised by the licensee’s licence.

Licensee must give consent to authorisation

             (4)  The authorisation can only be given if the licensee gives the body corporate its written consent to the authorisation. The licensee may give consent in relation to either a specified natural person or a specified class of natural persons (the membership of which might change from time to time).

When authorisation is of no effect

             (5)  The authorisation:

                     (a)  is of no effect if subsection (6) applies to it when it is given; and

                     (b)  ceases to have effect if and when subsection (6) starts to apply to it after it is given;

to the extent that subsection (6) applies.

             (6)  This subsection applies to the authorisation to the extent that it purports to authorise:

                     (a)  a natural person to engage in a credit activity that is not authorised by the licensee’s licence; or

                     (b)  a natural person to engage in a credit activity, and a banning order or disqualification order under Part 2‑4 is in force against the natural person in relation to the credit activity; or

                     (c)  a natural person who is not a member of the AFCA scheme; or

                     (d)  a natural person who is banned from engaging in a credit activity under a law of a State or Territory; or

                     (e)  a natural person who has been convicted, within the last 10 years, of serious fraud; or

                      (f)  a natural person against whom a prescribed State or Territory order is in force; or

                     (g)  a natural person in relation to the authorisation of whom the licensee has not given its written consent in accordance with subsection (4).

             (7)  To avoid doubt, an authorisation under subsection (1) is taken, for the purposes of sections 66 to 72, to be given by the body corporate, not the licensee.

66  Credit representative of 2 or more licensees

             (1)  One person can be the credit representative of 2 or more licensees, but only if:

                     (a)  each of those licensees has consented to the person also being the credit representative of each of the other licensees; or

                     (b)  each of the licensees is a related body corporate of each of the other licensees.

             (2)  An authorisation:

                     (a)  is of no effect if it contravenes subsection (1) when it is given; and

                     (b)  ceases to have effect if and when it starts to contravene subsection (1) after it is given.

67  A person cannot be a credit representative in relation to credit activities authorised by a person’s licence

             (1)  A person must not authorise another person to engage in a credit activity as a credit representative under subsection 64(1) or 65(1) if the other person holds a licence authorising the person to engage in the credit activity.

             (2)  An authorisation:

                     (a)  is of no effect if it contravenes subsection (1) when it is given; and

                     (b)  ceases to have effect if and when it starts to contravene subsection (1) after it is given.

68  Variation and revocation of authorisations and sub‑authorisations

Variation and revocation of authorisations

             (1)  An authorisation under subsection 64(1) may be varied or revoked at any time by the licensee giving written notice to the credit representative.

Variation and revocation of sub‑authorisations

             (2)  An authorisation under subsection 65(1) may be varied or revoked at any time by:

                     (a)  the licensee in relation to whom the authorisation was given; or

                     (b)  the body corporate that gave the authorisation;

giving written notice to the credit representative.

             (3)  If a person varies or revokes an authorisation under subsection (2), that person must give the other person who could have varied or revoked the authorisation written notice of the variation or revocation.

69  Obligation not to give authorisation that has no effect

Requirement not to give authorisation

             (1)  A person must not purport to authorise a credit representative under subsection 64(1) or 65(1) if, at the time the person first purports to give the authorisation, it is of no effect, to any extent, under this Division.

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    2 years imprisonment.

70  Obligation to vary or revoke authorisation that ceases to have effect

Requirement to vary or revoke authorisation

             (1)  If a person:

                     (a)  has authorised a credit representative under subsection 64(1) or 65(1); and

                     (b)  becomes aware of a matter because of which the authorisation of the credit representative has ceased to have effect under this Division;

the person must, as soon as practicable:

                     (c)  revoke the authorisation; or

                     (d)  vary the authorisation so that it is no longer, to any extent, of no effect under this Division.

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is required to vary or revoke an authorisation under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes subsection (1).

Criminal penalty:    2 years imprisonment.

71  Obligation to notify ASIC etc. about credit representatives

Requirement to notify ASIC when credit representative authorised

             (1)  If a person authorises a credit representative under subsection 64(1) or 65(1), the person must, within 15 business days of the authorisation, lodge with ASIC a written notice in accordance with subsection (3).

Civil penalty:          5,000 penalty units.

Requirement to notify licensee of sub‑authorisation

             (2)  If:

                     (a)  a person authorises a natural person as a credit representative of a licensee under subsection 65(1) (which deals with sub‑authorisations); and

                     (b)  the consent of the licensee to the authorisation was given in relation to a specified class of natural persons;

then the person must, within 15 business days of the authorisation, give the licensee written notice of the authorisation in accordance with subsection (3).

Civil penalty:          5,000 penalty units.

Details to be included in notice

             (3)  The notice must include the following details:

                     (a)  the name and business address of the credit representative;

                     (b)  details of the authorisation, including the date on which it was made and what the credit representative is authorised to do on behalf of the licensee;

                     (c)  details of the external dispute resolution scheme of which the credit representative is a member;

                     (d)  details of each other licensee on behalf of whom the credit representative is a credit representative.

Requirement to notify ASIC of change in details etc.

             (4)  If:

                     (a)  a person authorises a credit representative under subsection 64(1) or 65(1); and

                     (b)  either:

                              (i)  any of the details that are referred to in subsection (3) in relation to the credit representative changes; or

                             (ii)  the person revokes the authorisation;

then the person must, within 10 business days of the change or revocation, lodge with ASIC a written notice of the change or revocation.

Civil penalty:          5,000 penalty units.

             (5)  A notice given under subsection (1), (2) or (4) must be in the approved form.

Strict liability offence

             (6)  A person commits an offence if:

                     (a)  the person is subject to a requirement to give a notice under subsection (1), (2) or (4); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    60 penalty units.

             (7)  Subsection (6) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code.

72  Credit representative numbers

             (1)  Within a reasonable period after receiving a notice under subsection 71(1) of the authorisation of a credit representative, ASIC must allocate the credit representative a unique credit representative number.

             (2)  ASIC must give written notice of the credit representative number to:

                     (a)  the credit representative; and

                     (b)  the person who authorised the credit representative.

             (3)  This section does not apply in relation to a credit representative that has already been allocated a credit representative number.

Division 3Information about representatives

73  ASIC may give licensee information about representatives

ASIC may give licensee information about representatives

             (1)  If ASIC considers it appropriate to do so, it may give information to a licensee about a person whom ASIC believes is, or will be, a representative of the licensee. However, ASIC may only do so if it believes, on reasonable grounds, that the information is true.

Requirements about use of information

             (2)  A licensee to whom information is given under subsection (1) may make use of, make a record of, or give to another person, the information for a purpose connected with:

                     (a)  the licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving the information; or

                     (b)  the licensee taking action pursuant to such a decision.

             (3)  A licensee to whom information is given under subsection (1) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (2).

Civil penalty:          5,000 penalty units.

             (4)  A person to whom information has been given for a purpose or purposes under subsection (2) or this subsection may make use of, make a record of, or give to another person, that information for that purpose or any of those purposes.

             (5)  A person to whom information has been given for a purpose or purposes under subsection (2) or (4) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (4).

Civil penalty:          5,000 penalty units.

Offence

             (6)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (3) or (5); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    1 year imprisonment.

Qualified privilege

             (7)  A person has qualified privilege in relation to an act done by the person under subsection (2) or (4).

Use of information obtained under this section in court

             (8)  A person to whom information is given in accordance with this section must not give any of the information to a court, or produce in a court a document that sets out some or all of the information, except:

                     (a)  for a purpose connected with:

                              (i)  a licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving some or all of the information; or

                             (ii)  a licensee taking action pursuant to that decision; or

                            (iii)  proving in proceedings in that court that particular action taken by a licensee in relation to the representative was taken pursuant to that decision; or

                     (b)  in proceedings in that court, in so far as the proceedings relate to an alleged contravention of this section; or

                     (c)  in proceedings about giving to a court false information some, at least, of which was the information given under this section.

             (9)  For the purposes of subsection (8), a licensee takes action in relation to a representative if the licensee:

                     (a)  takes action by way of making, terminating or varying the terms and conditions of an agreement; or

                     (b)  otherwise takes action in relation to an agreement;

to the extent that the agreement relates to the representative acting on behalf of the licensee.

           (10)  Subsection (8) also has the effect it would have if:

                     (a)  a reference in it to a court were a reference to a court of an external Territory or of a country outside Australia and the external Territories; and

                     (b)  paragraph (8)(b) were omitted.

Division 4Liability of licensees for representatives

74  Application of this Division

                   This Division applies to any conduct of a representative of a licensee:

                     (a)  that relates to a credit activity; and

                     (b)  on which a third person (the client) could reasonably be expected to rely; and

                     (c)  on which the client in fact relied in good faith.

75  Responsibility if representative of only one licensee

                   If the representative is the representative of only one licensee, the licensee is responsible, as between the licensee and the client, for the conduct of the representative, whether or not the representative’s conduct is within the authority of the licensee.

76  Representatives of multiple licensees

When this section applies

             (1)  This section applies if the representative is the representative of more than one licensee.

Conduct covered by only one authority

             (2)  If:

                     (a)  the representative is the representative of one of the licensees only in relation to a particular class of credit activity; and

                     (b)  the conduct relates to that class of credit activity;

that licensee is responsible for the conduct, as between that licensee and the client, whether or not the conduct is within the authority of the licensee.

Conduct covered by multiple authorities

             (3)  If:

                     (a)  the representative is the representative of more than one of the licensees in relation to a particular class of credit activity; and

                     (b)  the conduct relates to that class of credit activity; and

                     (c)  the conduct is within the authority of:

                              (i)  only one of those licensees (the authorising licensee); or

                             (ii)  2 or more of those licensees (the authorising licensees);

then:

                     (d)  if subparagraph (c)(i) applies—the authorising licensee is responsible for the conduct, as between that licensee and the client; or

                     (e)  if subparagraph (c)(ii) applies—the authorising licensees are jointly and severally responsible for the conduct, as between themselves and the client.

All other cases

             (4)  In any other case, all of the licensees are jointly and severally responsible for the conduct, as between themselves and the client, whether or not the representative’s conduct is within the authority of any of them.

77  Responsibility extends to loss or damage suffered by client

                   The responsibility of a licensee under this Division extends so as to make the licensee liable to the client in relation to any loss or damage suffered by the client as a result of the representative’s conduct.

78  Effect of this Division

             (1)  If a licensee is responsible for the conduct of its representative under this Division, the client has the same remedies against the licensee that the client has against the representative.

             (2)  The licensee and the representative (along with any other licensees that are also responsible) are all jointly and severally liable to the client in relation to those remedies.

             (3)  However, nothing in this Division imposes:

                     (a)  any criminal responsibility; or

                     (b)  any civil liability under a provision of this Act apart from this Division;

on a licensee that would not otherwise be imposed on the licensee.

             (4)  This Division does not relieve a representative of a licensee of any liability that the representative has to the client or the licensee.

             (5)  An agreement has no effect in so far as it purports to alter or restrict the operation of section 75, 76 or 77.

             (6)  However, subsection (5) does not apply to the extent that the agreement:

                     (a)  provides for a representative of a licensee to indemnify the licensee for a liability of the licensee in relation to the representative; or

                     (b)  provides for a licensee, for whom a representative acts, to indemnify another licensee for a liability in relation to the representative.

             (7)  A licensee must not make, or offer to make, an agreement that has, or would have, no effect under subsection (5).

Part 2‑4Banning or disqualification of persons from engaging in credit activities

Division 1Introduction

79  Guide to this Part

This Part is about banning or disqualifying persons from:

       (a)     engaging in credit activities; or

      (b)     controlling others who engage in credit activities; or

       (c)     performing some or any functions involved in others engaging in credit activities.

The bans are orders made by ASIC under Division 2.

The disqualifications are orders made by the court under Division 3.

Division 2Banning orders

80  ASIC’s power to make a banning order

Making a banning order

             (1)  ASIC may, in writing, make one or more orders (banning orders) against a person:

                     (a)  if ASIC suspends or cancels a licence of the person; or

                     (b)  if the person becomes insolvent; or

                     (c)  for a natural person—if the person is convicted of fraud; or

                     (d)  if the person has:

                              (i)  contravened any credit legislation; or

                             (ii)  been involved in a contravention of a provision of any credit legislation by another person; or

                     (e)  if ASIC has reason to believe that the person is likely to:

                              (i)  contravene any credit legislation; or

                             (ii)  be involved in a contravention of a provision of any credit legislation by another person; or

                      (f)  if ASIC has reason to believe that the person is not a fit and proper person to:

                              (i)  engage in one or more credit activities; or

                             (ii)  perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

                            (iii)  control another person who engages in credit activities; or

                    (fa)  if ASIC has reason to believe that the person is not adequately trained, or is not competent, to:

                              (i)  engage in one or more credit activities; or

                             (ii)  perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

                            (iii)  control another person who engages in credit activities; or

                    (fb)  if the person has, at least twice, been linked to a refusal or failure to give effect to a determination made by AFCA (as defined in section 910C of the Corporations Act 2001) relating to a complaint that relates to:

                              (i)  credit activities; or

                             (ii)  a financial services business (within the meaning of the Corporations Act 2001); or

                    (fc)  if subsection (3) applies to the person in relation to 2 or more corporations; or

                     (g)  if a prescribed State or Territory order is in force against the person; or

                     (h)  in any other circumstances prescribed by the regulations.

When a person is not a fit and proper person

             (2)  For the purposes of paragraph (1)(f), ASIC must have regard to the matters in section 37B.

When a person has been an officer of a corporation unable to pay its debts

             (3)  This subsection applies to a person in relation to a corporation if, within the last 7 years:

                     (a)  the person was an officer (within the meaning of the Corporations Act 2001) of the corporation when the corporation was:

                              (i)  engaging in credit activities; or

                             (ii)  carrying on a financial services business (within the meaning of the Corporations Act 2001); and

                     (b)  the corporation was wound up either:

                              (i)  while the person was such an officer of the corporation; or

                             (ii)  within the 12 months after the person ceased to be such an officer of the corporation; and

                     (c)  a liquidator lodged a report under subsection 533(1) of the Corporations Act 2001 (including that subsection as applied by section 526‑35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation’s inability to pay its debts.

Person to be given an opportunity to be heard

             (4)  Despite subsection (1), ASIC may only make a banning order against a person after giving the person an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC on the matter.

             (5)  Subsection (4) does not apply if:

                     (a)  ASIC’s grounds for making a banning order against a person include that ASIC has suspended or cancelled a licence of the person (see paragraph (1)(a)); and

                     (b)  the suspension or cancellation took place without a hearing under section 54.

             (6)  Subsection (4) also does not apply if:

                     (a)  ASIC’s grounds for making a banning order against a person include that the person has been convicted of fraud (see paragraph (1)(c)); and

                     (b)  the person has been convicted of serious fraud.

Copy of banning order to be given to the person

             (7)  ASIC must give a copy of a banning order to the person against whom it was made.

81  What a banning order prohibits

             (1)  A banning order made against a person may specify that the person is prohibited from doing one or more of the following:

                     (a)  engaging in any credit activities;

                     (b)  engaging in specified credit activities in specified circumstances or capacities;

                     (c)  controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;

                     (d)  performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);

                     (e)  performing specified functions involved in the engaging in of credit activities.

             (2)  The banning order may specify that a particular prohibition specified in the order applies against the person:

                     (a)  if the sole ground for the banning order is because paragraph 80(1)(fc) applies—for a specified period of up to 5 years; or

                     (b)  otherwise—either permanently or for a specified period.

Note:          This subsection applies separately to each prohibition specified in the order.

             (3)  A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:

                     (a)  to do specified acts; or

                     (b)  to do specified acts in specified circumstances;

that the order would otherwise prohibit them from doing.

             (4)  A banning order is not a legislative instrument.

82  Effect of banning orders

Requirement not to engage in conduct contrary to banning order

             (1)  A person must not engage in conduct that is contrary to a banning order that is in force against the person.

Civil penalty:          5,000 penalty units.

Offence

             (2)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    5 years imprisonment.

Note:          A person against whom a banning order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the banning order applies (see subsection 40(1)).

83  Variation or cancellation of banning orders

             (1)  ASIC may vary or cancel a banning order if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order.

             (2)  ASIC may do so:

                     (a)  on its own initiative; or

                     (b)  if the person against whom the order was made lodges with ASIC an application for the variation or cancellation.

             (3)  The application must be in the approved form.

             (4)  If ASIC proposes not to vary or cancel a banning order in accordance with an application given by a person under paragraph (2)(b), ASIC must give the person an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC on the matter.

             (5)  ASIC must give written notice of the variation or cancellation of a banning order to the person against whom the order was made.

84  Date of effect, notice and publication of banning order, variation or cancellation

             (1)  A banning order comes into force when it is given to the person against whom it is made.

             (2)  A variation or cancellation of a banning order comes into force when written notice of the variation or cancellation is given to the person against whom the order was made.

             (3)  ASIC must publish a notice on ASIC’s website as soon as practicable after making, varying or cancelling a banning order. The notice must state when the banning order, or variation or cancellation of the banning order, came into force and:

                     (a)  in the case of the making of a banning order—set out a copy of the banning order; or

                     (b)  in the case of the variation of a banning order—set out a copy of the banning order as varied.

             (4)  However, if the banning order contains a provision of the kind referred to in subsection 81(3) and ASIC considers that the notice on its website would be unreasonably long if that provision were included, the notice may instead set out a summary of the provision’s effect.

85  Statement of reasons

             (1)  A copy of a banning order given to a person must be accompanied by a statement of reasons for the order.

             (2)  If ASIC varies a banning order made against a person, ASIC must, on request by the person, give the person a statement of reasons for the variation.

Division 3Disqualification by the court

86  Disqualification by the court

             (1)  ASIC may apply to the court for one or more orders under subsection (2) in relation to a person if ASIC:

                     (a)  cancels a licence of the person; or

                     (b)  makes a banning order against the person that is to operate permanently.

             (2)  The court may make:

                     (a)  one or more orders disqualifying the person, permanently or for a specified period, from doing one or more of the following:

                              (i)  engaging in any credit activities;

                             (ii)  engaging in specified credit activities in specified circumstances or capacities;

                            (iii)  controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;

                            (iv)  performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);

                             (v)  performing specified functions involved in the engaging in of credit activities; or

                     (b)  any other order the court considers appropriate.

Note:          A person against whom a disqualification order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the disqualification order applies (see subsection 40(1)).

Part 2‑5Financial records, trust accounts and audit reports

Division 1Introduction

87  Guide to this Part

This Part is about financial records, trust accounts and matters relating to audit reports required under this Act.

Division 2 deals with the requirement for licensees to keep certain financial records, and provides for how those records must be kept.

Division 3 deals with trust accounts. Licensees that provide credit services and that receive money on behalf of others in the course of those services are required to maintain a trust account. Those licensees must also comply with requirements in relation to trust account money, trust account statements and trust account audit reports.

Division 4 has requirements relating to audit reports required by this Act, and the auditors that prepare those reports.

Division 2Financial records of licensees

88  Obligation to keep financial records

Requirement to keep financial records

             (1)  A licensee must:

                     (a)  keep financial records that correctly record and explain the transactions and financial position of any business of engaging in credit activities carried on by the licensee; and

                     (b)  keep those records in accordance with this Division; and

                     (c)  comply with subsection 90(2) in relation to the conversion of records into the English language; and

                     (d)  comply with section 91 in relation to the location and production of records and particulars.

Civil penalty:          5,000 penalty units.

Meaning of financial records

             (2)  Financial records includes:

                     (a)  invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and

                     (b)  documents of prime entry; and

                     (c)  any trust account statement or trust account report required under section 100.

Offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement in relation to financial records under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes subsection (1).

Criminal penalty:    5 years imprisonment.

Financial records may be kept with other records

             (4)  A licensee does not contravene this Division merely because some or all of the financial records are prepared as a part of, or in conjunction with, the records relating to any other business that is carried on by the licensee.

Note:          For the purposes of subsection (3), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

89  How financial records are to be kept

                   The financial records must be kept in a way that:

                     (a)  enables true and fair profit and loss statements, and balance sheets, of the business referred to in paragraph 88(1)(a) to be prepared from time to time; and

                     (b)  allows those statements and balance sheets to be conveniently and properly audited in accordance with the auditing standards (if any) prescribed by regulations made under section 106.

90  Language of financial records

             (1)  The financial records must be kept in writing in the English language, or in a manner that enables them to be readily accessible and readily converted into writing in the English language.

             (2)  If any of the financial records are not kept in writing in the English language, the licensee must, if required to convert the financial records concerned into writing in the English language by a person who is entitled to examine the financial records concerned, comply with the requirement within a reasonable time.

91  Location of financial records

                   If any of the financial records are kept outside this jurisdiction, the licensee must:

                     (a)  cause to be sent to and retained at a place in this jurisdiction such particulars in relation to the business dealt with in those financial records as will enable true and fair profit and loss statements and balance sheets to be prepared; and

                     (b)  if required by ASIC to produce those financial records at a place in this jurisdiction, comply with the requirement not later than 28 days after the requirement is made.

92  Information to be shown in financial records

                   The financial records must be kept in sufficient detail to show particulars of:

                     (a)  all money received or paid by the licensee; and

                     (b)  for each credit contract under which the licensee is the credit provider:

                              (i)  the amount and day of all payments made by or on behalf of the debtor under the credit contract; and

                             (ii)  all amounts (including principal, interest, fees and charges) owed by the debtor under the credit contract; and

                     (c)  for each consumer lease under which the licensee is the lessor—the amount and day of all payments made by or on behalf of the lessee under the consumer lease; and

                     (d)  for each guarantee under which the licensee is the beneficiary of the guarantee—the amount and day of all payments made by or on behalf of the guarantor under the guarantee; and

                     (e)  all income received by the licensee from indirect remuneration, interest, and other sources, and all expenses, indirect remuneration, and interest paid by the licensee; and

                      (f)  all the assets and liabilities (including contingent liabilities) of the licensee; and

                     (g)  any other matters prescribed by the regulations.

93  Regulations may impose additional requirements

                   The regulations may impose additional requirements to be complied with in relation to the financial records including, for example:

                     (a)  requirements for things to be contained in the records; and

                     (b)  requirements relating to the level of detail to be shown in the records.

94  Financial records taken to be made with licensee’s authority

                   An entry in the records is, unless the contrary is proved, to be taken to have been made by, or with the authority of, the licensee.

95  Obligation to retain financial records for 7 years

Requirement to retain financial records

             (1)  A licensee that is required by this Division to make a financial record must retain it for 7 years after the transactions covered by the record are completed.

Civil penalty:          5,000 penalty units.

Regulations

             (2)  The regulations may prescribe financial records to which subsection (1) does not apply.

Records to be kept even if person stops carrying on business

             (3)  Financial records must be retained in accordance with this section, even if the person stops carrying on any business to which they relate.

Offence

             (4)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

96  Financial records are prima facie evidence of matters

             (1)  In proceedings in a court, a financial record kept under this Division is admissible as prima facie evidence of any matter in the financial record.

             (2)  A document purporting to be a financial record kept by a licensee under this Division is, unless the contrary is proved, presumed to be a financial record kept by the licensee under this Division.

             (3)  If:

                     (a)  because of subsection (1) a financial record is prima facie evidence of a matter; and

                     (b)  the financial record, or a part of the financial, is kept or prepared by recording or storing matters (including that matter) by means of a mechanical, electronic or other device;

a written reproduction of that matter as so recorded or stored is admissible as prima facie evidence of that matter in a proceeding in a court.

             (4)  A written document that purports to reproduce a matter recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is proved, presumed to be a reproduction of that matter.

Division 3Trust accounts of credit service licensees

97  Application of this Division

                   This Division applies to a licensee (the credit service licensee) that:

                     (a)  holds a licence that authorises the licensee to provide a credit service; and

                     (b)  in the course of providing the credit service, receives money on behalf of another person.

98  Obligation for credit service licensees to maintain trust account

Requirement to maintain trust account

             (1)  The credit service licensee must maintain one more trust accounts (the trust account) in accordance with this section.

Civil penalty:          5,000 penalty units.

Requirements for trust accounts

             (2)  The trust account must be maintained with an Australian ADI (within the meaning of section 9 of the Corporations Act 2001).

             (3)  The trust account must be designated as the credit service licensee’s trust account.

Offence

             (4)  The credit service licensee commits an offence if:

                     (a)  the credit service licensee is subject to a requirement under subsection (1); and

                     (b)  the credit service licensee engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

99  Obligations in relation to trust account money

Requirement to pay money to credit of trust account

             (1)  The credit service licensee must pay to the credit of the trust account any money received by the credit service licensee on behalf of another person in relation to the credit service provided by the licensee.

Civil penalty:          5,000 penalty units.

Requirement in relation to withdrawal of money from trust account

             (2)  The credit service licensee must not withdraw any money paid into the trust account, other than for the purpose of paying the money in accordance with subsection (3).

Civil penalty:          5,000 penalty units.

Requirement in relation to payment of money from trust account

             (3)  The credit service licensee must pay any money withdrawn from the trust account to the person or persons lawfully entitled to receive that money.

Civil penalty:          5,000 penalty units.

Offence

             (4)  The credit service licensee commits an offence if:

                     (a)  the credit service licensee is subject to a requirement under subsection (1), (2) or (3); and

                     (b)  the credit service licensee engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    6 months imprisonment.

Trust account money not available for payment of debts etc.

             (5)  Money paid into a trust account by the credit service licensee under this section:

                     (a)  is not available for the payment of a debt of any other creditor of the credit service licensee; and

                     (b)  is not liable to be attached or taken in execution under the order or process of a court at the instance of any such creditors.

100  Obligation to lodge trust account statement and trust account audit report

Requirement to prepare and lodge trust account statement

             (1)  The credit service licensee must, for each financial year of the credit service licensee:

                     (a)  prepare a written statement in relation to the trust account (the trust account statement) in accordance with this section; and

                     (b)  lodge the trust account statement with ASIC in accordance with this section.

Civil penalty:          5,000 penalty units.

Requirement to prepare and lodge trust account audit report

             (2)  The credit service licensee must, with the trust account statement, lodge with ASIC an auditor’s report (the trust account audit report) in accordance with this section.

Civil penalty:          5,000 penalty units.

Requirements for statement and audit report

             (3)  Each of the trust account statement and trust account audit report must:

                     (a)  be in the approved form; and

                     (b)  contain the information and matters prescribed by the regulations; and

                     (c)  be lodged with ASIC in accordance with section 101.

             (4)  The trust account audit report must be prepared by a person who complies with any eligibility requirements prescribed by the regulations.

Offence

             (5)  The credit service licensee commits an offence if:

                     (a)  the credit service licensee is subject to a requirement under subsection (1) or (2); and

                     (b)  the credit service licensee engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    5 years imprisonment.

                   Meaning of financial year

             (6)  A financial year of the credit service licensee means:

                     (a)  if the credit service licensee is a body corporate to which section 323D of the Corporations Act 2001 applies—a financial year of the body corporate (within the meaning of that section); and

                     (b)  in any other case—a year ending on 30 June.

101  Time of lodgment of trust account statement and trust account audit report

             (1)  Unless an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the day that is 3 months after the end of the financial year of the credit service licensee to which they relate.

             (2)  If an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the end of the extended period.

             (3)  ASIC may, on application made:

                     (a)  by the credit service licensee and the auditor that is to prepare the trust account audit report; and

                     (b)  before the end of the period that would otherwise apply;

approve an extension of the period for lodging the trust account statement and trust account audit report. The extension may be of the period originally applicable or the period applicable under a previous extension.

             (4)  An approval may be given subject to any conditions imposed by ASIC.

             (5)  If an approval is given subject to conditions, the licensee must comply with those conditions.

Division 4Matters relating to audit reports

102  Auditor’s right of access to records, information etc.

Auditor is entitled to access and assistance etc. from licensee

             (1)  An auditor (the auditor) who prepares one of the following audit reports (the audit report):

                     (a)  an audit report required under subsection 49(3) in relation to a licensee;

                     (b)  a trust account audit report required under subsection 100(2) in relation to a licensee;

has a right of access at all reasonable times to the financial records or other credit books of the licensee for purposes relating to the audit report.

             (2)  The auditor is entitled to require:

                     (a)  from the licensee; or

                     (b)  if the licensee is a body corporate—from any director, secretary or senior manager of the licensee;

any assistance and explanations that the auditor desires for purposes relating to the audit report.

Requirement to give auditor access and assistance etc.

             (3)  The licensee, or a director, secretary or senior manager of the licensee if it is a body corporate, must not:

                     (a)  refuse or fail to allow the auditor access, in accordance with subsection (1), to financial records or other credit books of the licensee; or

                     (b)  refuse or fail to give assistance, or an explanation, to the auditor as and when required under subsection (2); or

                     (c)  otherwise hinder, obstruct or delay the auditor in the performance or exercise of the auditor’s duties or powers.

Civil penalty:          5,000 penalty units.

Offence

             (4)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (3); and

                     (b)  the person engages in conduct; and

                     (c)  the person’s conduct contravenes the requirement.

Criminal penalty:    2 years imprisonment.

103  Auditor’s fees and expenses

             (1)  The reasonable fees and expenses of the auditor for preparing the audit report are payable by the licensee.

             (2)  The auditor may recover those fees by action against the licensee.

104  Auditor to report on certain matters

Requirement for auditor to disclose maters

             (1)  If the auditor, in the performance of duties relating to the audit report, becomes aware of a matter referred to in subsection (2), the auditor must, within 7 days after becoming aware of the matter:

                     (a)  lodge a written report on the matter with ASIC; and

                     (b)  give a copy of the report to the licensee.

Civil penalty:          5,000 penalty units.

Matters that must be disclosed

             (2)  A report must be given in relation to any matter that, in the opinion of the auditor:

                     (a)  has adversely affected, is adversely affecting or may adversely affect the ability of the licensee to meet the licensee’s obligations as a licensee; or

                     (b)  constitutes or may constitute a contravention of:

                              (i)  Division 2 or 3 (or regulations made under those Divisions); or

                             (ii)  a condition of the licensee’s licence; or

                     (c)  constitutes an attempt to unduly influence, coerce, manipulate or mislead the auditor in the preparation of the audit report.

Offence

             (3)  The auditor commits an offence if:

                     (a)  the auditor is subject to a requirement under subsection (1); and

                     (b)  the auditor engages in conduct; and

                     (c)  the auditor’s conduct contravenes the requirement.

Criminal penalty:    1 year imprisonment.

105  Qualified privilege for auditor etc.

Qualified privilege for auditor

             (1)  The auditor has qualified privilege in relation to:

                     (a)  a statement that the auditor makes, orally or in writing, in the course of its duties relating to the audit report; or

                     (b)  the lodging of a report with ASIC under subsection 104(1); or

                     (c)  the giving of a report to the licensee under subsection 104(1).

Note:          If the auditor is a company, the company has qualified privilege under this subsection in relation to statements made, and reports lodged or sent, by natural persons on behalf of the company if those statements and notices can be properly attributed to the company.

Qualified privilege for registered company auditor acting on behalf of company

             (2)  If the auditor is a company registered under the Corporations Act 2001, a registered company auditor acting on behalf of the company has qualified privilege in relation to:

                     (a)  a statement that the registered company auditor makes (orally or in writing) in the course of the performance, on behalf of the company, of the company’s duties relating to the audit report; or

                     (b)  the lodging by the registered company auditor, on behalf of the company, of a report with ASIC under subsection 104(1); or

                     (c)  the giving by the registered company auditor, on behalf of the company, of a report to the licensee under subsection 104(1).

Qualified privilege for subsequent publication

             (3)  A person has qualified privilege in relation to the publishing of a document prepared by the auditor in the course of the auditor’s duties relating to the audit report.

             (4)  A person has qualified privilege in relation to the publishing of a statement:

                     (a)  made by the auditor as referred to in subsection (1); or

                     (b)  made by a registered company auditor as referred to in subsection (2).

106  Regulations in relation to audit reports etc.

                   The regulations may make provision in relation to:

                     (a)  the audit reports referred to in subsection 102(1); and

                     (b)  audit reports that persons who have applied for a licence may be requested to lodge under subsection 37(4) or 46A(3); and

                     (c)  the auditors that prepare those reports; and

                     (d)  auditing standards that must be complied with in relation to those reports.

Part 2‑6Exemptions and modifications relating to this Chapter

Division 1Introduction

107  Guide to this Part

This Part is about exemptions from, and modifications of, the provisions of this Chapter.

Division 2 deals with how exemptions and modifications may be made by ASIC or by the regulations.

Division 2Exemptions and modifications relating to this Chapter

108  Provisions to which this Part applies

                   The provisions to which this Part applies are:

                     (a)  this Chapter; and

                     (b)  definitions in this Act, as they apply to references in this Chapter; and

                     (c)  instruments made for the purposes of this Chapter.

109  Exemptions and modifications by ASIC

Exemptions and modifications

             (1)  ASIC may:

                     (a)  exempt:

                              (i)  a person; or

                             (ii)  a person and all of the person’s credit representatives;

                            from all or specified provisions to which this Part applies; or

                     (b)  exempt a credit activity that is engaged in in relation to a specified credit contract, mortgage, guarantee or consumer lease from all or specified provisions to which this Part applies; or

                     (c)  declare that provisions to which this Part applies apply in relation to a person, or a credit activity referred to in paragraph (1)(b), as if specified provisions were omitted, modified or varied as specified in the declaration.

             (2)  An exemption or declaration under subsection (1) is not a legislative instrument.

             (3)  ASIC may, by legislative instrument:

                     (a)  exempt a class of persons from all or specified provisions to which this Part applies; or

                     (b)  exempt a credit activity (other than a credit activity referred to in paragraph (1)(b)) from all or specified provisions to which this Part applies; or

                     (c)  exempt a class of credit activities from all or specified provisions to which this Part applies; or

                     (d)  declare that provisions to which this Part applies apply in relation to a credit activity (other than a credit activity referred to in paragraph (1)(b)), or a class of persons or credit activities, as if specified provisions were omitted, modified or varied as specified in the declaration.

Conditions on exemptions

             (4)  An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The court may order the person to comply with the condition in a specified way. Only ASIC may apply to the court for the order.

Publication of exemptions and declarations

             (5)  An exemption or declaration under subsection (1) must be in writing and ASIC must publish notice of it on its website.

Special rules in relation to offences

             (6)  If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under paragraph (1)(c) or (3)(d) had not been made, that conduct does not constitute an offence unless, before the conduct occurred:

                     (a)  the text of the declaration was published by ASIC on its website; or

                     (b)  ASIC gave written notice setting out the text of the declaration to the person;

(in addition to complying with the requirements of the Legislation Act 2003 if the declaration is made under subsection (3)).

             (7)  In a prosecution for an offence to which subsection (6) applies, the prosecution must prove that paragraph (6)(a) or (b) was complied with before the conduct occurred.

110  Exemptions and modifications by the regulations

             (1)  The regulations may:

                     (a)  exempt a person or class of persons from all or specified provisions to which this Part applies; or

                     (b)  exempt a credit activity or a class of credit activities from all or specified provisions to which this Part applies; or

                     (c)  provide that the provisions to which this Part applies apply as if specified provisions were omitted, modified or varied as specified in the regulations.

             (2)  An exemption that:

                     (a)  is made for the purposes of paragraph (1)(a); and

                     (b)  exempts a person or class of persons from subsection 29(1) to enable testing of particular credit activities;

may apply unconditionally or subject to specified conditions.

             (3)  A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

             (4)  An exemption described in subsection (2) may empower ASIC to make decisions relating to how the exemption starts or ceases to apply to a person or class of persons.

Chapter 3Responsible lending conduct

Part 3‑1Licensees that provide credit assistance in relation to credit contracts

Division 1Introduction

111  Guide to this Part

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