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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 Treasury Laws Amendment (2021 Measures No. 4) Act 2021
An Act relating to credit, and for related purposes
Administered by: Treasury
Registered 21 Oct 2021
Start Date 01 Oct 2021

Commonwealth Coat of Arms of Australia

National Consumer Credit Protection Act 2009

No. 134, 2009

Compilation No. 31

Compilation date:                              1 October 2021

Includes amendments up to:            Act No. 72, 2021

Registered:                                         21 October 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 October 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     23

6............................ Meaning of credit activity................................................. 23

7............................ Meaning of credit service................................................. 24

8............................ Meaning of credit assistance............................................ 24

9............................ Meaning of acts as an intermediary................................. 25

10.......................... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee               26

Division 4—Other definitions                                                                                 27

12.......................... When a business is carried on in this jurisdiction............ 27

13.......................... Meaning of misleading..................................................... 27

14.......................... Meaning of person—generally includes a partnership...... 27

15.......................... Meaning of person—generally includes multiple trustees 28

15A....................... Meaning of associate........................................................ 30

15B........................ Meaning of mortgage broker........................................... 30

15C........................ Meaning of mortgage intermediary.................................. 31

16.......................... Qualified privilege............................................................ 31

16A....................... Meaning of control........................................................... 32

16B........................ Meaning of Registrar....................................................... 33

Part 1‑3—Application of this Act and the Transitional Act                      34

Division 1—Introduction                                                                                          34

17.......................... Guide to this Part.............................................................. 34

Division 2—Constitutional basis and application of this Act and the Transitional Act 35

18.......................... Constitutional basis for this Act and the Transitional Act. 35

19.......................... Meaning of referring State............................................... 36

20.......................... Meaning of referred credit matter.................................... 40

21.......................... General application of this Act and the Transitional Act... 40

22.......................... When Acts bind Crown.................................................... 42

Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws                                                                                                                      43

23.......................... Concurrent operation intended.......................................... 43

24.......................... When Commonwealth credit legislation does not apply.... 43

25.......................... Avoiding direct inconsistency between Commonwealth and State and Territory laws             44

26.......................... Regulations to deal with interaction between laws............ 46

Chapter 2—Licensing of persons who engage in credit activities   48

Part 2‑1—Requirement to be licensed to engage in credit activities      48

Division 1—Introduction                                                                                          48

27.......................... Guide to this Part.............................................................. 48

Division 2—Engaging in credit activities without a licence                   49

28.......................... Application of this Division.............................................. 49

29.......................... Prohibition on engaging in credit activities without a licence 49

Division 3—Other prohibitions relating to the requirement to be licensed         51

30.......................... Prohibitions on holding out and advertising etc................ 51

31.......................... Prohibition on conducting business with unlicensed persons  52

32.......................... Prohibition on charging a fee etc....................................... 52

Part 2‑2—Australian credit licences                                                                         54

Division 1—Introduction                                                                                          54

34.......................... Guide to this Part.............................................................. 54

Division 2—Australian credit licences                                                               55

35.......................... Australian credit licences.................................................. 55

Division 3—How to get an Australian credit licence                                 56

36.......................... Applying for a licence....................................................... 56

37.......................... When a licence may be granted—applicants other than ADIs  56

37A....................... Fit and proper person test................................................. 58

37B........................ Fit and proper person test—matters to which ASIC must have regard    59

38.......................... When a licence may be granted—ADIs............................ 60

39.......................... Regulations may prescribe streamlined process for other applicants        61

40.......................... Licences must not be granted to certain applicants............ 61

41.......................... Applicant must be given hearing before refusal of licence 62

42.......................... Notice of grant or refusal of licence and date of effect...... 62

43.......................... Australian credit licence numbers..................................... 62

44.......................... Basis on which licence is granted..................................... 63

Division 4—Conditions on an Australian credit licence                           64

45.......................... The conditions on the licence............................................ 64

46.......................... Licence conditions—special procedures for APRA‑regulated bodies      65

46A....................... ASIC may request information etc. in relation to an application for conditions to be varied    66

Division 5—Obligations of licensees                                                                   69

Subdivision A—General obligations                                                                   69

47.......................... General conduct obligations of licensees.......................... 69

48.......................... Requirements for compensation arrangements.................. 73

Subdivision B—Providing information and assistance to ASIC                  74

49.......................... Obligation to provide a statement or obtain an audit report if directed by ASIC      74

50.......................... Obligation to give ASIC information required by the regulations            76

50A....................... What are reportable situations?........................................ 77

50B........................ Obligation to lodge a report—reportable situations in relation to the licensee          79

50C........................ Obligation to lodge a report—reportable situations in relation to other licensees     81

50D....................... ASIC must publish details of certain reports.................... 82

51.......................... Obligation to provide ASIC with assistance if reasonably requested       83

Subdivision C—Notifying and remediating consumers affected by reportable situations          84

51A....................... Reporting to consumers affected by a reportable situation 84

51B........................ Obligation to investigate reportable situations that may affect consumers                86

51C........................ Obligation to keep records of compliance......................... 88

Subdivision D—Miscellaneous                                                                              89

52.......................... Obligation to cite Australian credit licence number........... 89

53.......................... Obligation to lodge annual compliance certificate............. 90

53A....................... Obligation to notify ASIC of change in control................ 91

53B........................ Obligation to notify ASIC if licensee does not engage in credit activities                92

53C........................ Knowledge and recklessness............................................ 92

Division 6—When a licence can be suspended, cancelled or varied  93

Subdivision A—Suspensions and cancellations                                                93

54.......................... Suspension or cancellation without hearing...................... 93

55.......................... Suspension or cancellation after offering a hearing........... 94

56.......................... Suspension and cancellation—special procedures for APRA‑regulated bodies       95

Subdivision B—Variations                                                                                    96

57.......................... Varying licences............................................................... 96

Subdivision C—Miscellaneous rules about suspensions, cancellations and variations                97

58.......................... Effect of suspension......................................................... 97

59.......................... Revocation of suspension................................................. 97

60.......................... Date of effect, notice and publication of variation, cancellation or suspension etc.   97

61.......................... Statement of reasons......................................................... 97

62.......................... ASIC may allow licence to continue in force.................... 97

Part 2‑3—Credit representatives and other representatives of licensees 99

Division 1—Introduction                                                                                          99

63.......................... Guide to this Part.............................................................. 99

Division 2—Authorisation of credit representatives                               100

64.......................... Licensee may authorise credit representatives................. 100

65.......................... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives........................................................................................ 101

66.......................... Credit representative of 2 or more licensees.................... 102

67.......................... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence........................................................................................ 103

68.......................... Variation and revocation of authorisations and sub‑authorisations          103

69.......................... Obligation not to give authorisation that has no effect.... 104

70.......................... Obligation to vary or revoke authorisation that ceases to have effect       104

71.......................... Obligation to notify ASIC etc. about credit representatives 105

72.......................... Credit representative numbers......................................... 107

Division 3—Information about representatives                                         108

73.......................... ASIC may give licensee information about representatives 108

Division 4—Liability of licensees for representatives                             111

74.......................... Application of this Division............................................ 111

75.......................... Responsibility if representative of only one licensee....... 111

76.......................... Representatives of multiple licensees.............................. 111

77.......................... Responsibility extends to loss or damage suffered by client 112

78.......................... Effect of this Division..................................................... 112

Part 2‑4—Banning or disqualification of persons from engaging in credit activities       114

Division 1—Introduction                                                                                        114

79.......................... Guide to this Part............................................................ 114

Division 2—Banning orders                                                                                  115

80.......................... ASIC’s power to make a banning order......................... 115

81.......................... What a banning order prohibits....................................... 117

82.......................... Effect of banning orders................................................. 118

83.......................... Variation or cancellation of banning orders.................... 119

84.......................... Date of effect, notice and publication of banning order, variation or cancellation     120

85.......................... Statement of reasons....................................................... 120

Division 3—Disqualification by the court                                                      121

86.......................... Disqualification by the court........................................... 121

Part 2‑5—Financial records, trust accounts and audit reports              122

Division 1—Introduction                                                                                        122

87.......................... Guide to this Part............................................................ 122

Division 2—Financial records of licensees                                                    123

88.......................... Obligation to keep financial records................................ 123

89.......................... How financial records are to be kept............................... 124

90.......................... Language of financial records......................................... 124

91.......................... Location of financial records........................................... 124

92.......................... Information to be shown in financial records.................. 125

93.......................... Regulations may impose additional requirements........... 126

94.......................... Financial records taken to be made with licensee’s authority 126

95.......................... Obligation to retain financial records for 7 years............ 126

96.......................... Financial records are prima facie evidence of matters..... 127

Division 3—Trust accounts of credit service licensees                           128

97.......................... Application of this Division............................................ 128

98.......................... Obligation for credit service licensees to maintain trust account               128

99.......................... Obligations in relation to trust account money................ 129

100........................ Obligation to lodge trust account statement and trust account audit report               130

101........................ Time of lodgment of trust account statement and trust account audit report             131

Division 4—Matters relating to audit reports                                             133

102........................ Auditor’s right of access to records, information etc...... 133

103........................ Auditor’s fees and expenses........................................... 134

104........................ Auditor to report on certain matters................................ 134

105........................ Qualified privilege for auditor etc................................... 135

106........................ Regulations in relation to audit reports etc...................... 136

Part 2‑6—Exemptions and modifications relating to this Chapter      137

Division 1—Introduction                                                                                        137

107........................ Guide to this Part............................................................ 137

Division 2—Exemptions and modifications relating to this Chapter 138

108........................ Provisions to which this Part applies.............................. 138

109........................ Exemptions and modifications by ASIC......................... 138

110........................ Exemptions and modifications by the regulations........... 140

Chapter 3—Responsible lending conduct                                        141

Part 3‑1—Licensees that provide credit assistance in relation to credit contracts              141

Division 1—Introduction                                                                                        141

111........................ Guide to this Part............................................................ 141

112........................ Application of this Part................................................... 142

Division 2—Credit guide of credit assistance providers                        143

113........................ Credit guide of credit assistance providers...................... 143

Division 3—Quote for providing credit assistance etc. in relation to credit contracts 146

114........................ Quote for providing credit assistance etc........................ 146

Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts                                                                                                149

115........................ Obligations of credit assistance providers before providing credit assistance for credit contracts            149

116........................ Preliminary assessment of unsuitability of the credit contract  150

117........................ Reasonable inquiries etc. about the consumer................. 150

118........................ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit........................................................................................ 151

119........................ When the credit contract must be assessed as unsuitable—remaining in credit contract           153

120........................ Providing the consumer with the preliminary assessment 155

Division 5—Fees, indirect remuneration etc. relating to credit contracts           157

121........................ Fees, indirect remuneration etc. relating to credit contracts 157

122........................ No profiting from fees etc. paid to third parties.............. 158

Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts   160

123........................ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts.......................................................................... 160

124........................ Prohibition on suggesting to consumers to remain in unsuitable credit contracts     162

Division 7—Special rules for short‑term and small amount credit contracts     165

124A..................... Prohibition on providing credit assistance in relation to short‑term credit contracts 165

124B...................... Licensee who makes representations about credit assistance in relation to small amount credit contracts must display information etc.................................................... 165

Part 3‑2—Licensees that are credit providers under credit contracts: general rules       167

Division 1—Introduction                                                                                        167

125........................ Guide to this Part............................................................ 167

Division 2—Credit guide of credit providers                                               168

126........................ Credit guide of credit providers...................................... 168

127........................ Credit guide of credit providers who are assignees......... 169

Division 3—Obligation to assess unsuitability                                             171

128........................ Obligation to assess unsuitability.................................... 171

129........................ Assessment of unsuitability of the credit contract........... 171

130........................ Reasonable inquiries etc. about the consumer................. 172

131........................ When credit contract must be assessed as unsuitable...... 173

132........................ Giving the consumer the assessment.............................. 175

Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts       177

133........................ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts                177

Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans                                                                                     180

Division 1—Introduction                                                                                        180

133A..................... Guide to this Part............................................................ 180

Division 2—Key Facts Sheets for standard home loans                        181

133AA.................. What is a standard home loan?...................................... 181

133AB................... What is a Key Facts Sheet for a standard home loan?..... 181

133AC................... Credit provider’s website to provide capacity to generate Key Facts Sheet              182

133AD.................. Credit provider to provide Key Facts Sheet in other situations 183

133AE................... What if more information is needed from the consumer? 184

133AF................... Defences to obligation to provide a Key Facts Sheet...... 185

Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts                                                                                                    187

Division 1—Introduction                                                                                        187

133B...................... Guide to this Part............................................................ 187

Division 2—Credit card contracts and related concepts                       189

133BA................... Meaning of credit card contract etc................................ 189

Division 3—Key Facts Sheets for credit card contract                          191

133BB................... What is a Key Facts Sheet for a credit card contract?...... 191

133BC................... Application form for credit card contract to include up‑to‑date Key Facts Sheet      191

133BD................... Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc.       192

Division 4—Offers etc. to increase, and entitlement to reduce, credit limit of credit card contract     194

133BE................... Credit provider not to offer etc. to increase credit limit of credit card contract          194

133BF................... Credit provider not to enter into credit card contract unless it allows credit limit to be reduced                195

133BFA................ Credit provider to provide online capacity to request reduction of credit limit          196

133BFB................. Credit provider not to suggest the consumer not reduce the credit limit   197

133BFC................. Credit provider to give effect to request to reduce credit limit  198

Division 5—Use of credit card in excess of credit limit                          200

133BH................... Credit provider to notify consumer of use of credit card in excess of credit limit     200

133BI.................... Credit provider not to impose fees etc. because credit card used in excess of credit limit         201

133BJ.................... Records of consents and withdrawals to be kept............ 202

Division 6—Order of application of payments made under credit card contracts          203

133BO................... Credit provider to apply payments in accordance with this Division        203

133BP................... Agreement to apply payment against particular amount owed  204

133BQ................... Application of payment against last statement balance, with higher interest debts to be discharged first  205

133BR................... Application of any remaining part of the relevant payment 205

Division 7—Calculation of interest under credit card contracts      206

133BS................... Credit provider not to impose retrospective interest charges 206

Division 8—Ending credit card contracts                                                     207

133BT................... Credit provider not to enter into credit card contract unless it allows for termination of contracts            207

133BU................... Credit provider to provide online capacity to request termination of credit card contract          208

133BV................... Credit provider not to suggest the consumer not terminate the credit card contract  209

133BW.................. Credit provider to give effect to request to terminate credit card contract 209

Part 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts                              211

Division 1—Introduction                                                                                        211

133C...................... Guide to this Part............................................................ 211

Division 2—Short‑term and small amount credit contracts                212

133CA................... Prohibition on entering, or increasing the credit limit of, short‑term credit contracts                212

133CB................... Licensee who makes representations about small amount credit contracts must display information etc. 212

133CC................... Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements................................................................... 213

Part 3‑2CA—Licensees supplying credit information to credit reporting bodies etc.      215

Division 1—Introduction                                                                                        215

133CM.................. Guide to this Part............................................................ 215

133CN................... Meanings of eligible licensee and eligible credit reporting body              215

133CO................... Meaning of eligible credit account.................................. 216

133CP................... Meaning of mandatory credit information..................... 216

133CQ................... Meaning of supply requirements.................................... 217

Division 2—Supplying credit information to credit reporting bodies etc.            219

Subdivision A—Initial bulk supplies of credit information                        219

133CR................... Requirement to supply.................................................... 219

133CS................... Exception if credit reporting body not complying with information security requirements      221

133CT................... Licensee must give notice if credit reporting body later complies with information security requirements........................................................................................ 222

Subdivision B—Ongoing supplies of credit information                             223

133CU................... Requirement to supply.................................................... 223

133CV................... Exception if credit reporting body not complying with information security requirements      226

133CW.................. Licensee must give notice if credit reporting body later complies with information security requirements........................................................................................ 227

Subdivision C—Offences                                                                                      228

133CX................... Offence relating to initial bulk supplies........................... 228

133CY................... Offence relating to ongoing supplies.............................. 228

133CZ................... Offence relating to giving notice if credit reporting body later complies with information security requirements........................................................................................ 229

Division 3—Conditions on credit reporting bodies on‑disclosing credit information     230

133CZA................ On‑disclosing information supplied under Division 2 etc. 230

133CZB................. Offence........................................................................... 231

Division 4—Reporting to the Minister                                                            232

133CZC................. Reports about initial bulk supplies of credit information. 232

133CZD................ Auditors.......................................................................... 233

133CZE................. Offence........................................................................... 233

Division 5—Assisting ASIC                                                                                   234

133CZF................. Meaning of Part 3‑2CA body......................................... 234

133CZG................ Obligation to provide a statement or obtain an audit report if directed by ASIC      234

133CZH................ Obligation to give ASIC information required by the regulations            235

133CZI.................. Obligation to provide ASIC with assistance if reasonably requested       236

133CZJ.................. Extended application of Division 4 of Part 2‑5............... 237

Division 6—Miscellaneous                                                                                     238

133CZK................. This Part does not limit the Privacy Act 1988................. 238

133CZL................. Review of the operation of this Part................................ 238

133CZM................ Main constitutional basis................................................ 238

133CZN................ Other constitutional bases............................................... 238

Part 3‑2D—Licensees and reverse mortgages                                                  240

133DA.................. Guide to this Part............................................................ 240

133DB................... Giving projections of equity before providing credit assistance or entering credit contract      240

133DC................... Making reverse mortgage information statement available on website of credit provider or credit assistance provider.......................................................................... 242

133DD.................. Making reverse mortgage information statement available in other situations          243

133DE................... Representations that use the term “reverse mortgage” etc. 244

Part 3‑3—Licensees that provide credit assistance in relation to consumer leases             246

Division 1—Introduction                                                                                        246

134........................ Guide to this Part............................................................ 246

135........................ Application of this Part................................................... 247

Division 2—Credit guide of credit assistance providers                        248

136........................ Credit guide of credit assistance providers...................... 248

Division 3—Quote for providing credit assistance etc. in relation to consumer leases 251

137........................ Quote for providing credit assistance etc........................ 251

Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases                                                                                                       253

138........................ Obligations of credit assistance providers before providing credit assistance for consumer leases          253

139........................ Preliminary assessment of unsuitability of the consumer lease                254

140........................ Reasonable inquiries etc. about the consumer................. 254

141........................ When the consumer lease must be assessed as unsuitable—entering lease              255

142........................ When the consumer lease must be assessed as unsuitable—remaining in lease       256

143........................ Providing the consumer with the preliminary assessment 258

Division 5—Fees, indirect remuneration etc. relating to consumer leases           260

144........................ Fees, indirect remuneration etc. relating to consumer leases 260

145........................ No profiting from fees etc. paid to third parties.............. 261

Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases  262

146........................ Prohibition on suggesting, or assisting with, unsuitable consumer leases                262

147........................ Prohibition on suggesting to consumers to remain in unsuitable consumer leases   264

Part 3‑4—Licensees that are lessors under consumer leases                   267

Division 1—Introduction                                                                                        267

148........................ Guide to this Part............................................................ 267

Division 2—Credit guide of lessors                                                                   268

149........................ Credit guide of lessors.................................................... 268

150........................ Credit guide of lessors who are assignees...................... 269

Division 3—Obligation to assess unsuitability                                             271

151........................ Obligation to assess unsuitability.................................... 271

152........................ Assessment of unsuitability of the consumer lease......... 271

153........................ Reasonable inquiries etc. about the consumer................. 271

154........................ When consumer lease must be assessed as unsuitable.... 272

155........................ Giving the consumer the assessment.............................. 273

Division 4—Prohibition on entering unsuitable consumer leases      276

156........................ Prohibition on entering unsuitable consumer leases........ 276

Part 3‑5—Credit representatives                                                                              278

Division 1—Introduction                                                                                        278

157........................ Guide to this Part............................................................ 278

Division 2—Credit guide of credit representatives                                  279

158........................ Credit guide of credit representatives.............................. 279

Part 3‑5A—Mortgage brokers and mortgage intermediaries                 282

Division 1—Introduction                                                                                        282

Subdivision A—Guide to this Part                                                                     282

158K...................... Guide to this Part............................................................ 282

Subdivision B—Interpretation                                                                            282

158KA................... Doing acts....................................................................... 282

158KB................... Circumstances in which a secondary representative is taken to be acting within actual or apparent authority........................................................................................ 283

158KC................... Obligations under this Part in addition to other obligations 283

Division 2—Best interests obligations                                                              284

Subdivision A—Licensees that provide credit assistance in relation to credit contracts             284

158L...................... Application of this Subdivision...................................... 284

158LA................... Licensee must act in the best interests of the consumer... 284

158LB................... Conflict between consumer’s interests and those of the licensee etc.       284

Subdivision B—Credit representatives that provide credit assistance in relation to credit contracts      285

158LD................... Application of this Subdivision...................................... 285

158LE.................... Credit representative must act in the best interests of the consumer         285

158LF.................... Conflict between consumer’s interests and those of the credit representative etc.    285

Division 4—Conflicted remuneration                                                              287

Subdivision A—What is conflicted remuneration?                                       287

158N..................... Conflicted remuneration................................................. 287

158NA.................. Regulations may further define conflicted remuneration 287

Subdivision B—Ban on accepting conflicted remuneration                       288

158NB................... Licensee must not accept conflicted remuneration........... 288

158NC................... Credit representative must not accept conflicted remuneration 288

Subdivision C—Ban on giving conflicted remuneration                             288

158ND.................. Employer must not give employees conflicted remuneration 288

158NE................... Credit provider must not give conflicted remuneration... 289

158NF................... Mortgage intermediary must not give conflicted remuneration 289

Division 6—Miscellaneous                                                                                     291

158T...................... Anti‑avoidance................................................................ 291

Part 3‑6—Debt collectors                                                                                               292

Division 1—Introduction                                                                                        292

159........................ Guide to this Part............................................................ 292

Division 2—Credit guide of debt collectors                                                  293

160........................ Credit guide of debt collectors........................................ 293

Part 3‑6A—Miscellaneous rules                                                                                295

Division 1—Introduction                                                                                        295

160A..................... Guide to this Part............................................................ 295

Division 2—Representations                                                                                 296

160B...................... “Independent”, “impartial” or “unbiased” etc.................. 296

160C...................... “Financial counsellor” etc............................................... 297

Division 3—Giving misleading information                                                  299

160D..................... Prohibition on giving misleading information etc........... 299

Division 4—Giving authorisation for deductions by employer of debtor or lessee         300

160E...................... Requirements for giving authorisation to employer........ 300

Division 5—Periods for determining unsuitability in respect of credit card contracts 302

160F...................... Periods for determining unsuitability in respect of credit card contracts   302

Part 3‑7—Exemptions and modifications relating to this Chapter      303

Division 1—Introduction                                                                                        303

161........................ Guide to this Part............................................................ 303

Division 2—Exemptions and modifications relating to this Chapter 304

162........................ Provisions to which this Part applies.............................. 304

163........................ Exemptions and modifications by ASIC......................... 304

164........................ Exemptions and modifications by the regulations........... 305

Chapter 4—Remedies                                                                                            307

Part 4‑1—Civil penalty provisions                                                                           307

Division 1—Introduction                                                                                        307

165........................ Guide to this Part............................................................ 307

Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions                                                                                                                    308

166........................ Declaration of contravention of civil penalty provision... 308

167........................ Court may order person to pay pecuniary penalty for contravening civil penalty provision     308

167A..................... Maximum pecuniary penalty........................................... 309

167B...................... Pecuniary penalty applicable........................................... 310

167C...................... Relinquishing the benefit derived from contravening a civil penalty provision        311

167D..................... Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision........................................................................................ 312

Division 3—General provisions relating to civil penalty provisions 313

168........................ Contravening a civil penalty provision is not an offence. 313

169........................ Attempt and involvement in contravention treated in same way as actual contravention          313

170........................ Civil evidence and procedure rules for proceedings relating to civil penalty provisions           313

171........................ Criminal proceedings before civil proceedings............... 313

172........................ Criminal proceedings during civil proceedings............... 313

173........................ Criminal proceedings after civil proceedings.................. 314

174........................ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings 314

175........................ Civil double jeopardy...................................................... 315

175A..................... Continuing contraventions of civil penalty provisions.... 315

175B...................... State of mind................................................................... 316

175C...................... Mistake of fact................................................................ 316

175D..................... Exceptions etc. to civil penalty provisions—burden of proof.. 317

175E...................... Civil penalty provisions contravened by employees, agents or officers   317

Part 4‑2—Power of the court to grant remedies                                             319

Division 1—Introduction                                                                                        319

176........................ Guide to this Part............................................................ 319

Division 2—Power of the court to grant remedies                                   320

177........................ Injunctions...................................................................... 320

178........................ Compensation orders...................................................... 321

179........................ Other orders to compensate loss or damage.................... 322

180........................ Orders in relation to unlawful credit activities................. 325

180A..................... Orders to remedy unfair or dishonest conduct by credit service providers               327

181........................ Preference must be given to compensate consumers....... 330

182........................ Adverse publicity orders................................................. 331

183........................ Relief from liability for contravention of civil penalty provision              331

184........................ Multiple remedies may be granted.................................. 332

Part 4‑3—Jurisdiction and procedure of courts                                             333

Division 1—Introduction                                                                                        333

185........................ Guide to this Part............................................................ 333

Division 2—Civil proceedings                                                                              334

Subdivision A—Application of this Division                                                   334

186........................ Application of this Division............................................ 334

Subdivision B—Conferral of civil jurisdiction                                              334

187........................ Civil jurisdiction of courts.............................................. 334

188........................ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers............................................................................ 335

189........................ Cross‑jurisdictional appeals............................................ 337

190........................ Courts to act in aid of each other..................................... 338

Subdivision C—Transfers between courts                                                       338

191........................ Transfers—application of Subdivision........................... 338

192........................ Transfers—exercise of transfer power............................ 339

193........................ Transfers—criteria for transfer....................................... 340

194........................ Transfers—how initiated................................................ 341

195........................ Transfers—documents and procedure............................ 341

196........................ Transfers—conduct of proceedings................................ 342

197........................ Transfers—entitlement to practise as a lawyer................ 342

198........................ Transfers—limitation on appeals.................................... 342

Subdivision D—Other matters                                                                            343

199........................ Plaintiffs may choose small claims procedure................. 343

200........................ Costs only if proceedings brought vexatiously etc.......... 348

201........................ Civil proceedings not to be stayed.................................. 349

202........................ Standard of proof in civil proceedings............................ 349

Division 3—Criminal proceedings                                                                     350

Subdivision A—Application of this Division                                                   350

203........................ Application of this Division............................................ 350

Subdivision B—Conferral of criminal jurisdiction                                      350

204........................ Criminal jurisdiction of courts........................................ 350

205........................ Criminal proceedings—laws to be applied...................... 353

206........................ Criminal proceedings—how taken.................................. 354

207........................ Certain persons to assist in prosecutions........................ 354

208........................ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 355

Division 4—Proceedings generally                                                                    357

209........................ ASIC’s power to intervene in proceedings..................... 357

210........................ Evidence of contravention............................................... 357

211........................ Power of court to punish for contempt of court.............. 358

Chapter 5—Administration                                                                            359

Part 5‑1—Matters relating to handling records and information        359

Division 1—Introduction                                                                                        359

212........................ Guide to this Part............................................................ 359

Division 1A—The Registrar                                                                                 360

Subdivision A—The Registrar                                                                            360

212A..................... Appointment of the Registrar.......................................... 360

212B...................... Functions........................................................................ 360

212C...................... Powers............................................................................ 360

212D..................... Directions by Minister.................................................... 361

212E...................... Delegation....................................................................... 361

212F...................... Assisted decision making............................................... 362

212G..................... Liability for damages...................................................... 362

Subdivision B—How the Registrar is to perform and exercise functions and powers  363

212H..................... Data standards................................................................ 363

212J....................... Giving information to the Registrar................................ 364

212K...................... How the Registrar is to perform and exercise functions and powers       364

Subdivision C—Disclosure of information                                                      365

212L...................... Disclosure framework.................................................... 365

212M..................... Protection of confidentiality of protected information..... 366

212N..................... Authorisation of recording or disclosure........................ 367

212P...................... Preventing disclosure of particular protected information 368

212Q..................... Authorisation for purposes of Privacy Act..................... 369

212R...................... Disclosure to a court....................................................... 369

Subdivision D—Miscellaneous                                                                            369

212S...................... Extracts of information to be admissible in evidence...... 369

212T...................... Annual report.................................................................. 370

212U..................... Rules............................................................................... 370

Division 2—Registers relating to credit activities                                     372

213........................ Credit registers................................................................ 372

214........................ Inspection and public availability of credit registers........ 373

Part 5‑2—Documents lodged with ASIC or required by this Act        374

Division 1—Introduction                                                                                        374

215........................ Guide to this Part............................................................ 374

Division 2—Lodgment of documents with ASIC                                        375

216........................ When documents are lodged with ASIC......................... 375

217........................ Approved forms for documents to be lodged with ASIC 375

218........................ ASIC may refuse to receive document etc...................... 376

Division 3—ASIC’s register of documents                                                    378

219........................ Register of documents lodged with ASIC...................... 378

220........................ ASIC may require person to give information for document registers     378

221........................ Written document setting out information from document registers is prima facie evidence of matters    379

Division 4—Other provisions relating to documents lodged with ASIC or required under this Act     381

222........................ Certified copy or extract of document lodged with ASIC is admissible in evidence                381

223........................ ASIC may destroy or dispose of certain documents....... 381

224........................ Court may order lodgment of document etc.................... 381

225........................ False or misleading documents....................................... 382

Part 5‑3—Concealment or falsification of credit books                             386

Division 1—Introduction                                                                                        386

226........................ Guide to this Part............................................................ 386

Division 2—Prohibitions relating to the concealment or falsification of credit books   387

227........................ Concealing etc. of credit books....................................... 387

228........................ Falsification of credit books............................................ 388

229........................ Precautions against falsification of credit books............. 389

Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 390

Division 1—Introduction                                                                                        390

230........................ Guide to this Part............................................................ 390

Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009          391

231........................ Fees are payable to the Commonwealth.......................... 391

232........................ Lodgment of document without payment of fee.............. 391

233........................ Doing act without payment of fee................................... 391

234........................ Effect of sections 232 and 233........................................ 391

235........................ Waiver and refund of fees............................................... 392

236........................ Debts due to the Commonwealth.................................... 392

237........................ Payment of fee does not give right to inspect or search.. 392

Part 5‑5—Other administrative matters                                                               393

Division 1—Introduction                                                                                        393

238........................ Guide to this Part............................................................ 393

Division 1A—Codes of conduct                                                                           394

Subdivision A—Approved codes of conduct                                                    394

238A..................... Approved codes of conduct............................................ 394

238B...................... Variations to approved codes of conduct........................ 395

238C...................... Review of approved codes of conduct............................ 396

238D..................... Obligation to comply with enforceable code provisions. 396

238E...................... Regulations..................................................................... 396

Subdivision B—Mandatory codes of conduct                                                 397

238F...................... Mandatory codes of conduct........................................... 397

238G..................... Obligation to comply with mandatory code of conduct... 397

Division 2—Other administrative matters                                                    398

239........................ ASIC has general administration of this Act................... 398

240........................ Obstructing or hindering ASIC etc................................. 398

242........................ ASIC may arrange for use of computer programs to make decisions      398

243........................ Qualified privilege for information given to ASIC......... 399

244........................ ASIC certificate is prima facie evidence of matters......... 399

245........................ Operator of AFCA scheme may give information to ASIC 400

Chapter 6—Compliance and enforcement                                     401

Part 6‑1—Investigations                                                                                                 401

Division 1—Introduction                                                                                        401

246........................ Guide to this Part............................................................ 401

Division 2—Investigations                                                                                     402

247........................ General powers of investigation..................................... 402

248........................ Minister may direct investigations.................................. 402

249........................ Interim report on investigation........................................ 403

250........................ Final report on investigation........................................... 404

251........................ Distribution of report...................................................... 404

Part 6‑2—Examination of persons                                                                          406

Division 1—Introduction                                                                                        406

252........................ Guide to this Part............................................................ 406

Division 2—Examination of persons                                                                407

253........................ Notice requiring appearance for examination.................. 407

254........................ Proceedings at examination............................................. 407

255........................ Requirements made of examinee..................................... 407

256........................ Examination to take place in private................................ 408

257........................ Examinee’s lawyer may attend........................................ 408

258........................ Record of examination.................................................... 409

259........................ Giving to other persons copies of record........................ 410

260........................ Copies given subject to conditions.................................. 410

261........................ Record to accompany report........................................... 411

Part 6‑3—Inspection of books and audit information‑gathering powers                412

Division 1—Introduction                                                                                        412

262........................ Guide to this Part............................................................ 412

Division 2—Inspection of books and audit information‑gathering powers          413

263........................ When certain powers may be exercised.......................... 413

264........................ ASIC may inspect books without charge........................ 413

265........................ Notice to auditors concerning information and books..... 414

266........................ Notice to produce books about credit activities or credit reporting           415

267........................ Notice to produce documents in person’s possession..... 416

268........................ ASIC may authorise persons to require production of books, giving of information etc.        417

271........................ Powers if books produced or seized............................... 418

272........................ Powers if books not produced........................................ 419

Part 6‑3A—Search warrants                                                                                      420

Division 1—Introduction                                                                                        420

272A..................... Guide to this Part............................................................ 420

Division 2—Extra application of Crimes Act search warrant provisions            421

Subdivision A—Basic extra application                                                           421

272B...................... Extra application of Crimes Act search warrant provisions 421

272C...................... Interpretation of modifications........................................ 422

Subdivision B—Modifications                                                                            422

272D..................... Major modifications—evidential material....................... 422

272E...................... Major modifications—who may apply for a warrant etc. 422

272F...................... Major modifications—purposes for which things may be used and shared             423

3ZQU.................... Purposes for which things may be used and shared....... 423

3ZQUA................. Commonwealth law permitting access to things seized under this Part does not apply            426

272G..................... Minor modifications....................................................... 427

Part 6‑4—Proceedings after an investigation                                                    429

Division 1—Introduction                                                                                        429

273........................ Guide to this Part............................................................ 429

Division 2—Proceedings after an investigation                                          430

274........................ ASIC may prosecute....................................................... 430

275........................ ASIC may bring civil proceedings.................................. 431

Part 6‑5—Hearings                                                                                                            432

Division 1—Introduction                                                                                        432

276........................ Guide to this Part............................................................ 432

Division 2—Hearings                                                                                                433

277........................ Power to hold hearings................................................... 433

278........................ General discretion to hold hearing in public or private.... 433

279........................ Request by person appearing at hearing that it take place in public          433

280........................ Certain hearings to take place in private.......................... 434

281........................ ASIC may restrict publication of certain material............ 434

282........................ Who may be present when hearing takes place in private 435

283........................ Involvement of person entitled to appear at hearing........ 436

284........................ Power to summon witnesses and take evidence.............. 436

285........................ Proceedings at hearings.................................................. 437

286........................ ASIC to take account of evidence and submissions........ 438

287........................ Reference to court of question of law arising at hearing. 438

288........................ Protection of ASIC members etc.................................... 439

Part 6‑5A—Penalties for offences                                                                            440

Division 1—Introduction                                                                                        440

288A..................... Guide to this Part............................................................ 440

Division 2—Penalty for committing an offence                                          441

288B...................... Penalty for committing an offence.................................. 441

288C...................... Penalty applicable to an offence committed by an individual 441

288D..................... Penalty applicable to an offence committed by a body corporate              442

288E...................... Meaning of benefit derived and detriment avoided because of an offence               443

288F...................... Where is the penalty for an offence specified?................ 443

288G..................... If no penalty is specified................................................. 444

Part 6‑5B—Infringement notices                                                                              445

Division 1—Introduction                                                                                        445

288H..................... Guide to this Part............................................................ 445

Division 2—Infringement notices                                                                       446

288J....................... When an infringement notice may be given.................... 446

288K...................... Provisions subject to an infringement notice................... 446

288L...................... Matters to be included in an infringement notice............. 447

288M..................... Payment period............................................................... 450

288N..................... Extension of time to pay amount..................................... 451

288P...................... Payment by instalments.................................................. 452

288Q..................... Withdrawal of an infringement notice............................. 453

288R...................... Effect of payment of amount........................................... 455

288S...................... Effect of this Part............................................................ 456

Part 6‑6—Offences under this Chapter                                                               457

Division 1—Introduction                                                                                        457

289........................ Guide to this Part............................................................ 457

Division 2—Offences                                                                                                 458

290........................ Contraventions of requirements made under this Chapter 458

291........................ False information............................................................ 459

293........................ Disrupting hearings........................................................ 459

294........................ Concealing books relevant to investigation..................... 460

295........................ Self‑incrimination........................................................... 460

296........................ Legal professional privilege............................................ 461

297........................ Powers of court relating to contraventions of this Chapter 462

Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter  464

Division 1—Introduction                                                                                        464

298........................ Guide to this Part............................................................ 464

Division 2—ASIC’s powers in relation to contraventions of this Chapter          465

299........................ Application of this Part................................................... 465

300........................ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases         465

301........................ Orders under this Part..................................................... 466

Part 6‑7A—Product intervention orders                                                             467

Division 1—Introduction                                                                                        467

301A..................... Guide to this Part............................................................ 467

Division 2—Product intervention orders                                                       468

301B...................... Definitions...................................................................... 468

301C...................... Application of product intervention orders..................... 468

301D..................... ASIC may make product intervention orders.................. 468

301E...................... Significant detriment to consumers................................. 470

301F...................... ASIC to consult before making product intervention orders 471

301G..................... Commencement and duration of product intervention orders 471

301H..................... Extension of product intervention orders........................ 472

301J....................... Amendment of product intervention orders.................... 473

301K...................... Revocation of product intervention orders...................... 474

301L...................... ASIC to issue public notice of product intervention orders 474

301M..................... Remaking product intervention orders............................ 476

301N..................... Product intervention orders may require notification...... 476

301P...................... Enforcement of product intervention orders.................... 476

Part 6‑8—Evidentiary use of certain material                                                  478

Division 1—Introduction                                                                                        478

302........................ Guide to this Part............................................................ 478

Division 2—Evidentiary use of certain material                                        479

303........................ Statements made at an examination: proceedings against examinee          479

304........................ Statements made at an examination: other proceedings... 480

305........................ Weight of evidence admitted under section 304.............. 480

306........................ Objection to admission of statements made at examination 481

307........................ Copies of, or extracts from, certain books...................... 482

308........................ Report under Part 6‑1..................................................... 483

309........................ Exceptions to admissibility of report............................... 483

310........................ Material otherwise admissible......................................... 484

Part 6‑9—Miscellaneous provisions relating to compliance and enforcement      485

Division 1—Introduction                                                                                        485

311........................ Guide to this Part............................................................ 485

Division 2—Miscellaneous provisions relating to compliance and enforcement               486

312........................ Requirement made of a body corporate........................... 486

313........................ Evidence of authority...................................................... 486

314........................ Giving documents to natural persons.............................. 486

315........................ Place and time for production of books.......................... 487

316........................ Application of Crimes Act and Evidence Act................. 487

317........................ Allowances and expenses............................................... 487

318........................ Expenses of investigation under Part 6‑1........................ 488

319........................ Recovery of expenses of investigation............................ 488

320........................ Compliance with this Chapter......................................... 489

321........................ Effect of this Chapter...................................................... 489

322........................ Enforcement of undertakings.......................................... 489


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.

Australian business law means a law of the Commonwealth, or of a State or Territory, that is a law that regulates, or relates to the regulation of, business or persons engaged in business.

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.

banking group means a relevant group of bodies corporate (within the meaning of the Banking Act 1959) that includes a body corporate covered by paragraph 133CN(1)(a) (about large ADIs).

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 body means:

                     (a)  an Agency (within the meaning of the Public Service Act 1999); or

                     (b)  a body, whether incorporated or not, established for a public purpose by or under a law of the Commonwealth; or

                     (c)  a person:

                              (i)  holding or performing the duties of an office established by or under a law of the Commonwealth; or

                             (ii)  holding an appointment made under a law of the Commonwealth.

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.

core obligation has the meaning given by subsection 50A(3).

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 information has the same meaning as in the Privacy Act 1988.

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:

                     (a)  when used in Part 3‑2CA—has the same meaning as in the Privacy Act 1988; and

                     (b)  otherwise—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 of this Act.

credit registers: see section 213.

credit reporting body has the same meaning as in the Privacy Act 1988.

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.

data standards means standards made by the Registrar under section 212H.

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

declaration of contravention means a declaration made under section 166.

designated secrecy provision has the meaning given by subsection 212N(3).

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

disclosure framework means the disclosure framework made by the Registrar under section 212L.

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

document registers: see section 219.

eligible credit account: see section 133CO.

eligible credit reporting body: see subsection 133CN(2).

eligible licensee: see subsection 133CN(1).

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.

evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

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 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.

government entity has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999.

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

head company, of a banking group, means the member of the group covered by paragraph 133CN(1)(a) (about large ADIs).

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.

knowledge, in Division 5 of Part 2‑2: see section 53C.

large ADI has the same meaning as in the Banking Act 1959.

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 and Family Court of Australia (Division 2); 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.

mandatory credit information: see section 133CP.

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.

official employment means:

                     (a)  appointment or employment by the Commonwealth, or the performance of services for the Commonwealth; or

                     (b)  the exercise of powers or performance of functions under a delegation by the Registrar.

Part 3‑2CA body: see section 133CZF.

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).

personal information has the same meaning as in the Privacy Act 1988.

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.

protected information means information:

                     (a)  obtained by a person in the course of the person’s official employment; and

                     (b)  disclosed to the person or another person, or obtained by the person or another person:

                              (i)  under, or in relation to, this Act; or

                             (ii)  under another law of the Commonwealth;

                            in connection with particular functions or powers of the Registrar.

qualified privilege has a meaning affected by section 16.

receiving court: see section 191.

recklessness, in Division 5 of Part 2‑2: see section 53C.

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.

Reference Checking and Information Sharing Protocol means the protocol determined by ASIC under subsection 47(3A).

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.

Registrar has the meaning given by section 16B.

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 and Family Court of Australia (Division 2)—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).

reportable situation has the meaning given by section 50A.

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.

secrecy provision has the meaning given by subsection 212N(2).

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

sensitive information has the same meaning as in the Privacy Act 1988.

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.

supply requirements: see section 133CQ.

taxation law has the same meaning as in the Income Tax Assessment Act 1997.

Territory:

                     (a)  means the following:

                              (i)  the Australian Capital Territory;

                             (ii)  the Jervis Bay Territory;

                            (iii)  the Northern Territory;

                            (iv)  Norfolk Island;

                             (v)  the Territory of Christmas Island;

                            (vi)  the Territory of Cocos (Keeling) Islands; and

                     (b)  when used in a geographical sense—includes the Territory’s coastal sea (if any).

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.

16B  Meaning of Registrar

                   A reference in this Act to the Registrar is a reference to:

                     (a)  if only one Commonwealth body is appointed as Registrar under section 212A—that body; or

                     (b)  if more than one Commonwealth body is appointed under that section:

                              (i)  if the reference relates to one or more particular functions or powers—any Commonwealth body so appointed with any of those particular functions or powers; or

                             (ii)  otherwise—any of the Commonwealth bodies appointed under that section.

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

Subdivision AGeneral obligations

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

                    (ea)  comply with the Reference Checking and Information Sharing Protocol in relation to:

                              (i)  if the licensee is an individual to whom the Protocol applies—the licensee; and

                             (ii)  if a former, current or prospective representative of the licensee is an individual to whom the Protocol applies—the representative; 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.

Reference Checking and Information Sharing Protocol

          (3A)  ASIC may, by legislative instrument, determine a protocol for:

                     (a)  sharing information about any or all of the following:

                              (i)  a licensee who is an individual;

                             (ii)  individuals who are former, current or prospective representatives of a licensee;

                            by that licensee with another licensee; and

                     (b)  sharing information about any or all of the following:

                              (i)  a licensee who is an individual;

                             (ii)  individuals who are former, current or prospective representatives of a licensee;

                            by that licensee with a financial services licensee within the meaning of the Corporations Act 2001; and

                     (c)  keeping and retaining records of information shared, and the circumstances under which that information is shared.

          (3B)  The Reference Checking and Information Sharing Protocol must not:

                     (a)  require or permit personal information (within the meaning of the Privacy Act 1988) to be shared, other than with the consent of the individual to whom the information relates; or

                     (b)  require information to be shared in relation to conduct that occurred more than 5 years before the information is shared.

Application of Reference Checking and Information Sharing Protocol

          (3C)  The Reference Checking and Information Sharing Protocol applies to an individual mentioned in subparagraph (3A)(a)(i) or (ii) if there are reasonable grounds to suspect that, if the individual becomes a representative of the licensee mentioned in paragraph (3A)(a), the individual will:

                     (a)  provide credit assistance in relation to credit contracts secured by mortgages over residential property; and

                     (b)  be a mortgage broker or a director, employee or agent of a mortgage broker.

          (3D)  The Reference Checking and Information Sharing Protocol applies to an individual mentioned in subparagraph (3A)(b)(i) or (ii) if there are reasonable grounds to suspect that the individual will provide personal advice to retail clients about relevant financial products if the individual becomes a representative of the financial services licensee mentioned in paragraph (3A)(b).

          (3E)  Expressions used in subsection (3D) that are also used in the Corporations Act 2001 (other than Reference Checking and Information Sharing Protocol) have the same meaning in that subsection as they have in that Act.

Qualified privilege

           (3F)  A person has qualified privilege in relation to information shared in accordance with the Reference Checking and Information Sharing Protocol about an individual to whom the Protocol applies.

          (3G)  A person who has qualified privilege under subsection (3F) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

Civil penalty for non‑compliance

             (4)  The licensee must not contravene paragraph (1)(a), (b), (e), (ea), (f), (g), (h), (i), (j), (k), (l) or (m).

Civil penalty:          5,000 penalty units.

Note:          Contravening paragraphs (1)(c) (obligation to comply with conditions on the licence) and (d) (compliance with the credit legislation) has consequences under other provisions.

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).

Subdivision BProviding information and assistance to ASIC

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.

50A  What are reportable situations?

             (1)  There is a reportable situation in relation to a licensee if one of the following paragraphs is satisfied:

                     (a)  the licensee or a representative of the licensee has breached a core obligation and the breach is significant;

                     (b)  the licensee or a representative of the licensee is no longer able to comply with a core obligation and the breach, if it occurs, will be significant;

                     (c)  the licensee or a representative of the licensee conducts an investigation into whether there is a reportable situation of the kind mentioned in paragraph (a) or (b) and the investigation continues for more than 30 days;

                     (d)  an investigation described in paragraph (c) discloses that there is no reportable situation of the kind mentioned in paragraph (a) or (b).

             (2)  There is also a reportable situation in relation to a licensee if:

                     (a)  in the course of engaging in a credit activity, the licensee or a representative of the licensee has engaged in conduct constituting gross negligence; or

                     (b)  the licensee or a representative of the licensee has committed serious fraud; or

                     (c)  any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

             (3)  Each of the following is a core obligation:

                     (a)  an obligation under section 47, other than the obligation under paragraph 47(1)(d);

                     (b)  the obligation under paragraph 47(1)(d), so far as it relates to this Act, the Transitional Act and Division 2 of Part 2 of the ASIC Act and regulations made for the purpose of that Division;

                     (c)  the obligation under paragraph 47(1)(d), so far as it relates to Commonwealth legislation that is covered by paragraph (d) of the definition of credit legislation.

             (4)  For the purposes of this section, a breach of a core obligation is taken to be significant if:

                     (a)  the breach is constituted by the commission of an offence under any law and the commission of the offence is punishable on conviction by a penalty that may include imprisonment for a maximum period of:

                              (i)  if the offence involves dishonesty—3 months or more; or

                             (ii)  in any other case—12 months or more; or

                     (b)  the breach is constituted by a contravention of a civil penalty provision under any law, other than a civil penalty provision prescribed by the regulations for the purposes of this paragraph; or

                     (c)  the breach is constituted by a contravention of a key requirement (as defined for the purposes of the National Credit Code), other than a key requirement prescribed by the regulations for the purposes of this paragraph; or

                     (d)  the breach is constituted by a contravention of subsection 12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial service); or

                     (e)  the breach results, or is likely to result, in material loss or damage to a credit activity client of the licensee; or

                      (f)  any other circumstances prescribed by the regulations for the purposes of this paragraph exist.

             (5)  Otherwise, for the purposes of this section, a breach of a core obligation is significant having regard to the following:

                     (a)  the number or frequency of similar breaches;

                     (b)  the impact of the breach on the licensee’s ability to engage in credit activities covered by the licence;

                     (c)  the extent to which the breach indicates that the licensee’s arrangements to ensure compliance with those obligations are inadequate;

                     (d)  any other matters prescribed by regulations made for the purposes of this paragraph.

             (6)  For the purposes of this section, a person is a credit activity client of a licensee if the person is a consumer who:

                     (a)  is a party to a credit contract, or will be a party to a proposed credit contract, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a credit provider; or

                     (b)  is a person to whom the licensee, or a representative of the licensee, provides a credit service; or

                     (c)  is a party to a consumer lease, or will be a party to a proposed consumer lease, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a lessor; or

                     (d)  is a mortgagor under a mortgage, or will be the mortgagor under a proposed mortgage, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights of a mortgagee; or

                     (e)  is the guarantor under a guarantee, or will be the guarantor under a proposed guarantee, in relation to which the licensee, or a representative of the licensee, performs the obligations, or exercises the rights, of a beneficiary under the guarantee; or

                      (f)  is a person in relation to whom the licensee, or a representative of the licensee, engages in a prescribed activity mentioned in item 6 of the table in subsection 6(1).

50B  Obligation to lodge a report—reportable situations in relation to the licensee

Reporting a reportable situation to ASIC

             (1)  If there are reasonable grounds to believe that a reportable situation has arisen in relation to a licensee:

                     (a)  the licensee must lodge a report in relation to the reportable situation with ASIC; and

                     (b)  the report must be lodged in accordance with this section.

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.

Report must be in the approved form

             (3)  The report must be lodged with ASIC in writing in the approved form.

Period within which report must be lodged

             (4)  The report must be lodged with ASIC within 30 days after the licensee first knows that, or is reckless with respect to whether, there are reasonable grounds to believe that the reportable situation has arisen.

Strict liability applies in relation to paragraphs (1)(a) and (b)

             (5)  Strict liability applies in relation to paragraphs (1)(a) and (b).

If report is received by APRA

             (6)  A report that a licensee is required to lodge with ASIC under this section in relation to a reportable situation is taken to have been lodged with ASIC if:

                     (a)  the licensee is a body regulated by APRA; and

                     (b)  the licensee has given a report to APRA that contains all of the information that is required in a report under this section in relation to the reportable situation.

             (7)  Subsection (1) does not apply to a licensee in relation to a reportable situation if:

                     (a)  the licensee is a body regulated by APRA; and

                     (b)  the auditor or actuary of the licensee gives APRA a written report about a matter to which the reportable situation relates; and

                     (c)  the report is given before, or within 10 business days after, the licensee first knows that, or is reckless with respect to whether, there are reasonable grounds to believe that the reportable situation has arisen.

50C  Obligation to lodge a report—reportable situations in relation to other licensees

Reporting a reportable situation to ASIC

             (1)  A licensee (the reporting licensee) must lodge a report with ASIC in accordance with this section if there are reasonable grounds to believe that:

                     (a)  a reportable situation has arisen in relation to another licensee of the kind mentioned in:

                              (i)  paragraph 50A(1)(a) or (b) (significant breach or likely breach of a core obligation); or

                             (ii)  subsection 50A(2) (gross negligence or serious fraud); and

                     (b)  one of the following is an individual who has engaged in conduct that forms part of the reportable situation:

                              (i)  the other licensee;

                             (ii)  an employee of the other licensee or of a related body corporate of the other licensee, acting within the scope of the employee’s employment;

                            (iii)  a director of the other licensee or of a related body corporate of the other licensee, acting within the scope of the director’s duties as director;

                            (iv)  another representative of the other licensee acting within the scope of the representative’s authority given by the licensee; and

                     (c)  the individual is a mortgage broker.

Civil penalty:          5,000 penalty units.

Report must be in the approved form

             (2)  The report must be lodged with ASIC in writing in the approved form.

Period within which report must be lodged

             (3)  The report must be lodged with ASIC within 30 days after the reporting licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b) and (c).

If the reportable situation already reported to ASIC

             (4)  Subsection (1) does not apply in relation to a reportable situation if there are reasonable grounds to believe that ASIC is aware of:

                     (a)  the existence of the reportable situation; and

                     (b)  all of the information that is required in a report under this section in relation to the reportable situation.

A copy of the report must be given to the other licensee

             (5)  The reporting licensee must give a copy of any report that the reporting licensee is required to lodge with ASIC under subsection (1) to the other licensee within 30 days after the reporting licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b) and (c).

Civil penalty:          5,000 penalty units.

             (6)  A licensee has qualified privilege in relation to a copy of a report given under subsection (5).

             (7)  A licensee who has qualified privilege under subsection (6) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

50D  ASIC must publish details of certain reports

             (1)  ASIC must, for each financial year, publish information about:

                     (a)  reports lodged with ASIC during the financial year under section 50B in relation to reportable situations of the kind mentioned in paragraphs 50A(1)(a) and (b) (breaches and likely breaches of core obligations); and

                     (b)  reports lodged with APRA during the financial year, as described in subsections 50B(6) and (7), in relation to reportable situations of the kind mentioned in paragraphs 50A(1)(a) and (b) (breaches and likely breaches of core obligations); and

                     (c)  the entities in relation to which those reports are lodged with ASIC or APRA.

             (2)  The information must:

                     (a)  be published within 4 months after the end of the financial year; and

                     (b)  be published on ASIC’s website; and

                     (c)  include the information (if any) prescribed by the regulations, which may include personal information (within the meaning of the Privacy Act 1988) in relation to a licensee who is an individual; and

                     (d)  if the regulations prescribe how the information is to be organised—be organised in accordance with the regulations.

             (3)  The regulations may prescribe circumstances in which information need not be included in the information published by ASIC under this section.

             (4)  ASIC may correct any error in, or omission from, information published under this section.

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.

Subdivision CNotifying and remediating consumers affected by reportable situations

51A  Reporting to consumers affected by a reportable situation

Notifying an affected consumer of a reportable situation

             (1)  A licensee must take reasonable steps to notify a consumer (the affected consumer) of a reportable situation in accordance with this section if:

                     (a)  the licensee, or a representative of the licensee, provides or has provided credit assistance to the affected consumer in relation to a credit contract secured by a mortgage over residential property; and

                     (b)  the licensee, or the representative of the licensee, is a mortgage broker; and

                     (c)  there are reasonable grounds to believe that a reportable situation has arisen in relation to the licensee as mentioned in:

                              (i)  paragraph 50A(1)(a) (significant breach of a core obligation); or

                             (ii)  subsection 50A(2) (gross negligence or serious fraud); and

                     (d)  there are reasonable grounds to suspect that:

                              (i)  the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

                             (ii)  the affected consumer has a legally enforceable right to recover the loss or damage from the licensee.

Civil penalty:          5,000 penalty units.

Form and period for giving notice

             (2)  A notice under this section must:

                     (a)  be given in writing within 30 days after the licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b), (c) and (d); and

                     (b)  if ASIC has approved the form in which the notice must be given:

                              (i)  be in the approved form; and

                             (ii)  include the information, statements, explanations or other matters required by the form; and

                            (iii)  be accompanied by any other material required by the form.

Qualified privilege

             (3)  A licensee has qualified privilege in relation to a notice given under this section.

             (4)  A licensee who has qualified privilege under subsection (3) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

51B  Obligation to investigate reportable situations that may affect consumers

Obligation to investigate

             (1)  A licensee must conduct an investigation into a reportable situation in accordance with this section if:

                     (a)  the licensee, or a representative of the licensee, has provided credit assistance to a consumer (the affected consumer) in relation to a credit contract secured by a mortgage over residential property; and

                     (b)  the licensee, or the representative of the licensee, is a mortgage broker; and

                     (c)  there are reasonable grounds to believe that a reportable situation has arisen in relation to the licensee as mentioned in:

                              (i)  paragraph 50A(1)(a) (significant breach of a core obligation); or

                             (ii)  subsection 50A(2) (gross negligence or serious fraud); and

                     (d)  there are reasonable grounds to suspect that:

                              (i)  the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

                             (ii)  the affected consumer has a legally enforceable right to recover the loss or damage from the licensee.

Civil penalty:          5,000 penalty units.

Period within which investigation must be commenced

             (2)  The investigation must be commenced within 30 days after the licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b), (c) and (d).

Matters to be considered in the investigation

             (3)  In conducting the investigation, the licensee must:

                     (a)  identify the conduct that gave rise to the reportable situation; and

                     (b)  quantify the loss or damage that there are reasonable grounds to believe:

                              (i)  the affected consumer has suffered or will suffer as a result of the reportable situation; and

                             (ii)  the affected consumer has a legally enforceable right to recover from the licensee; and

                     (c)  do anything else prescribed by the regulations for the purposes of this paragraph.

Completing the investigation

             (4)  The investigation must be completed as soon as is reasonably practicable after it is commenced.

Notifying affected consumer

             (5)  The licensee must take reasonable steps to give the affected consumer a notice of the outcome of the investigation:

                     (a)  in writing within 10 days after the investigation is completed; and

                     (b)  if ASIC has approved the form in which the notice must be given:

                              (i)  in the approved form; and

                             (ii)  that includes the information, statements, explanations or other matters required by the form; and

                            (iii)  that is accompanied by any other material required by the form.

Civil penalty:          5,000 penalty units.

             (6)  A licensee has qualified privilege in relation to a notice given under subsection (5).

             (7)  A licensee who has qualified privilege under subsection (6) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

Compensating the affected consumer for loss or damage

             (8)  If, after the investigation is completed, there are reasonable grounds to believe that:

                     (a)  the affected consumer has suffered or will suffer loss or damage as a result of the reportable situation; and

                     (b)  the affected consumer has a legally enforceable right to recover the loss or damage from the licensee;

the licensee must take reasonable steps to pay the affected consumer an amount equal to the loss or damage within 30 days after the investigation is completed.

Civil penalty:          5,000 penalty units.

Nothing affects right of affected consumer to pursue legally enforceable rights

             (9)  Nothing in this section affects any legally enforceable right of the affected consumer to recover loss or damage that the affected consumer suffers, or will suffer, as a result of a reportable situation.

           (10)  However, a court may take into account the amount paid by the licensee under this section when quantifying the amount of compensation (if any) to be paid by the licensee in relation to that loss or damage.

51C  Obligation to keep records of compliance

Obligation to keep records of compliance

             (1)  A licensee must keep records sufficient to enable the licensee’s compliance with this Subdivision to be readily ascertained.

             (2)  The regulations may specify records that the licensee must keep as part of the obligation in subsection (1).

Offence

             (3)  A person commits an offence if:

                     (a)  the person is subject to a requirement in relation to records under subsection (1); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes subsection (1).

Criminal penalty:    5 years imprisonment.

Subdivision DMiscellaneous

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.

53C  Knowledge and recklessness

                   In this Division:

knowledge has the meaning given by section 5.3 of the Criminal Code.

recklessness has the meaning given by section 5.4 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