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 24
6............................ Meaning of credit activity................................................. 24
7............................ Meaning of credit service................................................. 25
8............................ Meaning of credit assistance............................................ 25
9............................ Meaning of acts as an intermediary................................. 26
10.......................... Assignees of credit providers, lessors, mortgagees and beneficiaries of a guarantee 27
Division 4—Other definitions 28
12.......................... When a business is carried on in this jurisdiction............ 28
13.......................... Meaning of misleading..................................................... 28
14.......................... Meaning of person—generally includes a partnership...... 28
15.......................... Meaning of person—generally includes multiple trustees 29
15A....................... Meaning of associate........................................................ 31
15B........................ Meaning of mortgage broker........................................... 31
15C........................ Meaning of mortgage intermediary.................................. 32
16.......................... Qualified privilege............................................................ 32
16A....................... Meaning of control........................................................... 33
16B........................ Meaning of Registrar....................................................... 34
Part 1‑3—Application of this Act and the Transitional Act 35
Division 1—Introduction 35
17.......................... Guide to this Part.............................................................. 35
Division 2—Constitutional basis and application of this Act and the Transitional Act 36
18.......................... Constitutional basis for this Act and the Transitional Act. 36
19.......................... Meaning of referring State............................................... 37
20.......................... Meaning of referred credit matter.................................... 41
21.......................... General application of this Act and the Transitional Act... 41
22.......................... When Acts bind Crown.................................................... 43
Division 3—Interaction between the Commonwealth credit legislation and State and Territory laws 44
23.......................... Concurrent operation intended.......................................... 44
24.......................... When Commonwealth credit legislation does not apply.... 44
25.......................... Avoiding direct inconsistency between Commonwealth and State and Territory laws 45
26.......................... Regulations to deal with interaction between laws............ 47
Chapter 2—Licensing of persons who engage in credit activities 49
Part 2‑1—Requirement to be licensed to engage in credit activities 49
Division 1—Introduction 49
27.......................... Guide to this Part.............................................................. 49
Division 2—Engaging in credit activities without a licence 50
28.......................... Application of this Division.............................................. 50
29.......................... Prohibition on engaging in credit activities without a licence 50
Division 3—Other prohibitions relating to the requirement to be licensed 52
30.......................... Prohibitions on holding out and advertising etc................ 52
31.......................... Prohibition on conducting business with unlicensed persons 53
32.......................... Prohibition on charging a fee etc....................................... 53
Part 2‑2—Australian credit licences 55
Division 1—Introduction 55
34.......................... Guide to this Part.............................................................. 55
Division 2—Australian credit licences 56
35.......................... Australian credit licences.................................................. 56
Division 3—How to get an Australian credit licence 57
36.......................... Applying for a licence....................................................... 57
37.......................... When a licence may be granted—applicants other than ADIs 57
37A....................... Fit and proper person test................................................. 59
37B........................ Fit and proper person test—matters to which ASIC must have regard 60
38.......................... When a licence may be granted—ADIs............................ 61
39.......................... Regulations may prescribe streamlined process for other applicants 62
40.......................... Licences must not be granted to certain applicants............ 62
41.......................... Applicant must be given hearing before refusal of licence 63
42.......................... Notice of grant or refusal of licence and date of effect...... 63
43.......................... Australian credit licence numbers..................................... 63
44.......................... Basis on which licence is granted..................................... 64
Division 4—Conditions on an Australian credit licence 65
45.......................... The conditions on the licence............................................ 65
46.......................... Licence conditions—special procedures for APRA‑regulated bodies 66
46A....................... ASIC may request information etc. in relation to an application for conditions to be varied 67
Division 5—Obligations of licensees 70
Subdivision A—General obligations 70
47.......................... General conduct obligations of licensees.......................... 70
48.......................... Requirements for compensation arrangements.................. 74
Subdivision B—Providing information and assistance to ASIC 75
49.......................... Obligation to provide a statement or obtain an audit report if directed by ASIC 75
50.......................... Obligation to give ASIC information required by the regulations 77
50A....................... What are reportable situations?........................................ 78
50B........................ Obligation to lodge a report—reportable situations in relation to the licensee 81
50C........................ Obligation to lodge a report—reportable situations in relation to other licensees 82
50D....................... ASIC must publish details of certain reports.................... 84
51.......................... Obligation to provide ASIC with assistance if reasonably requested 85
Subdivision C—Notifying and remediating consumers affected by reportable situations 86
51A....................... Reporting to consumers affected by a reportable situation 86
51B........................ Obligation to investigate reportable situations that may affect consumers 87
51C........................ Obligation to keep records of compliance......................... 90
Subdivision D—Miscellaneous 90
52.......................... Obligation to cite Australian credit licence number........... 90
53.......................... Obligation to lodge annual compliance certificate............. 91
53A....................... Obligation to notify ASIC of change in control................ 93
53B........................ Obligation to notify ASIC if licensee does not engage in credit activities 93
53C........................ Knowledge and recklessness............................................ 94
Division 6—When a licence can be suspended, cancelled or varied 95
Subdivision A—Suspensions and cancellations 95
54.......................... Suspension or cancellation without hearing...................... 95
55.......................... Suspension or cancellation after offering a hearing........... 96
56.......................... Suspension and cancellation—special procedures for APRA‑regulated bodies 97
Subdivision B—Variations 98
57.......................... Varying licences............................................................... 98
Subdivision C—Miscellaneous rules about suspensions, cancellations and variations 99
58.......................... Effect of suspension......................................................... 99
59.......................... Revocation of suspension................................................. 99
60.......................... Date of effect, notice and publication of variation, cancellation or suspension etc. 99
61.......................... Statement of reasons......................................................... 99
62.......................... ASIC may allow licence to continue in force.................... 99
Part 2‑3—Credit representatives and other representatives of licensees 101
Division 1—Introduction 101
63.......................... Guide to this Part............................................................ 101
Division 2—Authorisation of credit representatives 102
64.......................... Licensee may authorise credit representatives................. 102
65.......................... Credit representative that is a body corporate may sub‑authorise natural persons as credit representatives........................................................................................ 103
66.......................... Credit representative of 2 or more licensees.................... 104
67.......................... A person cannot be a credit representative in relation to credit activities authorised by a person’s licence........................................................................................ 105
68.......................... Variation and revocation of authorisations and sub‑authorisations 105
69.......................... Obligation not to give authorisation that has no effect.... 106
70.......................... Obligation to vary or revoke authorisation that ceases to have effect 106
71.......................... Obligation to notify ASIC etc. about credit representatives 107
72.......................... Credit representative numbers......................................... 109
Division 3—Information about representatives 110
73.......................... ASIC may give licensee information about representatives 110
Division 4—Liability of licensees for representatives 113
74.......................... Application of this Division............................................ 113
75.......................... Responsibility if representative of only one licensee....... 113
76.......................... Representatives of multiple licensees.............................. 113
77.......................... Responsibility extends to loss or damage suffered by client 114
78.......................... Effect of this Division..................................................... 114
Part 2‑4—Banning or disqualification of persons from engaging in credit activities 116
Division 1—Introduction 116
79.......................... Guide to this Part............................................................ 116
Division 2—Banning orders 117
80.......................... ASIC’s power to make a banning order......................... 117
81.......................... What a banning order prohibits....................................... 120
82.......................... Effect of banning orders................................................. 121
83.......................... Variation or cancellation of banning orders.................... 121
84.......................... Date of effect, notice and publication of banning order, variation or cancellation 122
85.......................... Statement of reasons....................................................... 123
Division 3—Disqualification by the court 124
86.......................... Disqualification by the court........................................... 124
Part 2‑5—Financial records, trust accounts and audit reports 125
Division 1—Introduction 125
87.......................... Guide to this Part............................................................ 125
Division 2—Financial records of licensees 126
88.......................... Obligation to keep financial records................................ 126
89.......................... How financial records are to be kept............................... 127
90.......................... Language of financial records......................................... 127
91.......................... Location of financial records........................................... 127
92.......................... Information to be shown in financial records.................. 128
93.......................... Regulations may impose additional requirements........... 129
94.......................... Financial records taken to be made with licensee’s authority 129
95.......................... Obligation to retain financial records for 7 years............ 129
96.......................... Financial records are prima facie evidence of matters..... 130
Division 3—Trust accounts of credit service licensees 131
97.......................... Application of this Division............................................ 131
98.......................... Obligation for credit service licensees to maintain trust account 131
99.......................... Obligations in relation to trust account money................ 132
100........................ Obligation to lodge trust account statement and trust account audit report 133
101........................ Time of lodgment of trust account statement and trust account audit report 134
Division 4—Matters relating to audit reports 136
102........................ Auditor’s right of access to records, information etc...... 136
103........................ Auditor’s fees and expenses........................................... 137
104........................ Auditor to report on certain matters................................ 137
105........................ Qualified privilege for auditor etc................................... 138
106........................ Regulations in relation to audit reports etc...................... 139
Part 2‑6—Exemptions and modifications relating to this Chapter 140
Division 1—Introduction 140
107........................ Guide to this Part............................................................ 140
Division 2—Exemptions and modifications relating to this Chapter 141
108........................ Provisions to which this Part applies.............................. 141
109........................ Exemptions and modifications by ASIC......................... 141
110........................ Exemptions and modifications by the regulations........... 143
Chapter 3—Responsible lending conduct 144
Part 3‑1—Licensees that provide credit assistance in relation to credit contracts 144
Division 1—Introduction 144
111........................ Guide to this Part............................................................ 144
112........................ Application of this Part................................................... 145
Division 2—Credit guide of credit assistance providers 146
113........................ Credit guide of credit assistance providers...................... 146
Division 3—Quote for providing credit assistance etc. in relation to credit contracts 149
114........................ Quote for providing credit assistance etc........................ 149
Division 4—Obligations of credit assistance providers before providing credit assistance for credit contracts 152
115........................ Obligations of credit assistance providers before providing credit assistance for credit contracts 152
116........................ Preliminary assessment of unsuitability of the credit contract 153
117........................ Reasonable inquiries etc. about the consumer................. 153
118........................ When the credit contract must be assessed as unsuitable—entering contract or increasing the credit limit........................................................................................ 154
119........................ When the credit contract must be assessed as unsuitable—remaining in credit contract 156
120........................ Providing the consumer with the preliminary assessment 157
Division 5—Fees, indirect remuneration etc. relating to credit contracts 159
121........................ Fees, indirect remuneration etc. relating to credit contracts 159
122........................ No profiting from fees etc. paid to third parties.............. 160
Division 6—Prohibition on suggesting, or assisting with, unsuitable credit contracts 162
123........................ Prohibition on suggesting or assisting consumers to enter, or increase the credit limit under, unsuitable credit contracts.......................................................................... 162
124........................ Prohibition on suggesting to consumers to remain in unsuitable credit contracts 164
Division 7—Special rules for short‑term and small amount credit contracts 167
124A..................... Prohibition on providing credit assistance in relation to short‑term credit contracts 167
124B...................... Licensee who makes representations about credit assistance in relation to small amount credit contracts must display and give information........................................... 167
124C...................... Written documentation required in relation to the preliminary assessment for a small amount credit contract........................................................................................ 168
Part 3‑2—Licensees that are credit providers under credit contracts: general rules 170
Division 1—Introduction 170
125........................ Guide to this Part............................................................ 170
Division 2—Credit guide of credit providers 171
126........................ Credit guide of credit providers...................................... 171
127........................ Credit guide of credit providers who are assignees......... 172
Division 3—Obligation to assess unsuitability 174
128........................ Obligation to assess unsuitability.................................... 174
129........................ Assessment of unsuitability of the credit contract........... 174
130........................ Reasonable inquiries etc. about the consumer................. 175
131........................ When credit contract must be assessed as unsuitable...... 176
132........................ Giving the consumer the assessment.............................. 177
Division 4—Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 179
133........................ Prohibition on entering, or increasing the credit limit of, unsuitable credit contracts 179
Part 3‑2A—Licensees that are credit providers under credit contracts: additional rules relating to standard home loans 182
Division 1—Introduction 182
133A..................... Guide to this Part............................................................ 182
Division 2—Key Facts Sheets for standard home loans 183
133AA.................. What is a standard home loan?...................................... 183
133AB................... What is a Key Facts Sheet for a standard home loan?..... 183
133AC................... Credit provider’s website to provide capacity to generate Key Facts Sheet 184
133AD.................. Credit provider to provide Key Facts Sheet in other situations 185
133AE................... What if more information is needed from the consumer? 186
133AF................... Defences to obligation to provide a Key Facts Sheet...... 187
Part 3‑2B—Licensees that are credit providers under credit contracts: additional rules relating to credit card contracts 189
Division 1—Introduction 189
133B...................... Guide to this Part............................................................ 189
Division 2—Credit card contracts and related concepts 191
133BA................... Meaning of credit card contract etc................................ 191
Division 3—Key Facts Sheets for credit card contract 193
133BB................... What is a Key Facts Sheet for a credit card contract?...... 193
133BC................... Application form for credit card contract to include up‑to‑date Key Facts Sheet 193
133BD................... Credit provider not to enter into credit card contract unless Key Facts Sheet has been provided etc. 194
Division 4—Offers etc. to increase, and entitlement to reduce, credit limit of credit card contract 196
133BE................... Credit provider not to offer etc. to increase credit limit of credit card contract 196
133BF................... Credit provider not to enter into credit card contract unless it allows credit limit to be reduced 197
133BFA................ Credit provider to provide online capacity to request reduction of credit limit 198
133BFB................. Credit provider not to suggest the consumer not reduce the credit limit 199
133BFC................. Credit provider to give effect to request to reduce credit limit 200
Division 5—Use of credit card in excess of credit limit 202
133BH................... Credit provider to notify consumer of use of credit card in excess of credit limit 202
133BI.................... Credit provider not to impose fees etc. because credit card used in excess of credit limit 203
133BJ.................... Records of consents and withdrawals to be kept............ 204
Division 6—Order of application of payments made under credit card contracts 205
133BO................... Credit provider to apply payments in accordance with this Division 205
133BP................... Agreement to apply payment against particular amount owed 206
133BQ................... Application of payment against last statement balance, with higher interest debts to be discharged first 207
133BR................... Application of any remaining part of the relevant payment 207
Division 7—Calculation of interest under credit card contracts 208
133BS................... Credit provider not to impose retrospective interest charges 208
Division 8—Ending credit card contracts 209
133BT................... Credit provider not to enter into credit card contract unless it allows for termination of contracts 209
133BU................... Credit provider to provide online capacity to request termination of credit card contract 210
133BV................... Credit provider not to suggest the consumer not terminate the credit card contract 211
133BW.................. Credit provider to give effect to request to terminate credit card contract 211
Part 3‑2C—Licensees that are credit providers under credit contracts: additional rules relating to short‑term and small amount credit contracts 213
Division 1—Introduction 213
133C...................... Guide to this Part............................................................ 213
Division 2—Short‑term and small amount credit contracts 214
133CA................... Prohibition on entering, or increasing the credit limit of, short‑term credit contracts 214
133CB................... Licensee who makes representations in relation to small amount credit contracts must display and give information..................................................................... 214
133CC................... Licensee must not enter into a small amount credit contract if the repayments do not meet the prescribed requirements................................................................... 215
133CD................... Licensee must not enter into a small amount credit contract if repayment amounts and intervals are not equal........................................................................................ 217
133CE................... Written documentation required in relation to the assessment for a small amount credit contract 219
133CF................... Licensee not to make certain unsolicited communications in relation to a small amount credit contract 220
Part 3‑2CA—Licensees supplying credit information to credit reporting bodies etc. 222
Division 1—Introduction 222
133CM.................. Guide to this Part............................................................ 222
133CN................... Meanings of eligible licensee and eligible credit reporting body 222
133CO................... Meaning of eligible credit account.................................. 223
133CP................... Meaning of mandatory credit information..................... 223
133CQ................... Meaning of supply requirements.................................... 224
Division 2—Supplying credit information to credit reporting bodies etc. 226
Subdivision A—Initial bulk supplies of credit information 226
133CR................... Requirement to supply.................................................... 226
133CS................... Exception if credit reporting body not complying with information security requirements 228
133CT................... Licensee must give notice if credit reporting body later complies with information security requirements........................................................................................ 229
Subdivision B—Ongoing supplies of credit information 230
133CU................... Requirement to supply.................................................... 230
133CV................... Exception if credit reporting body not complying with information security requirements 233
133CW.................. Licensee must give notice if credit reporting body later complies with information security requirements........................................................................................ 235
Subdivision C—Offences 235
133CX................... Offence relating to initial bulk supplies........................... 235
133CY................... Offence relating to ongoing supplies.............................. 236
133CZ................... Offence relating to giving notice if credit reporting body later complies with information security requirements........................................................................................ 236
Division 3—Conditions on credit reporting bodies on‑disclosing credit information 237
133CZA................ On‑disclosing information supplied under Division 2 etc. 237
133CZB................. Offence........................................................................... 238
Division 4—Reporting to the Minister 239
133CZC................. Reports about initial bulk supplies of credit information. 239
133CZD................ Auditors.......................................................................... 240
133CZE................. Offence........................................................................... 240
Division 5—Assisting ASIC 241
133CZF................. Meaning of Part 3‑2CA body......................................... 241
133CZG................ Obligation to provide a statement or obtain an audit report if directed by ASIC 241
133CZH................ Obligation to give ASIC information required by the regulations 242
133CZI.................. Obligation to provide ASIC with assistance if reasonably requested 243
133CZJ.................. Extended application of Division 4 of Part 2‑5............... 244
Division 6—Miscellaneous 245
133CZK................. This Part does not limit the Privacy Act 1988................. 245
133CZL................. Review of the operation of this Part................................ 245
133CZM................ Main constitutional basis................................................ 245
133CZN................ Other constitutional bases............................................... 245
Part 3‑2D—Licensees and reverse mortgages 247
133DA.................. Guide to this Part............................................................ 247
133DB................... Giving projections of equity before providing credit assistance or entering credit contract 247
133DC................... Making reverse mortgage information statement available on website of credit provider or credit assistance provider.......................................................................... 249
133DD.................. Making reverse mortgage information statement available in other situations 250
133DE................... Representations that use the term “reverse mortgage” etc. 251
Part 3‑3—Licensees that provide credit assistance in relation to consumer leases 253
Division 1—Introduction 253
134........................ Guide to this Part............................................................ 253
135........................ Application of this Part................................................... 254
Division 2—Credit guide of credit assistance providers 255
136........................ Credit guide of credit assistance providers...................... 255
Division 3—Quote for providing credit assistance etc. in relation to consumer leases 258
137........................ Quote for providing credit assistance etc........................ 258
Division 4—Obligations of credit assistance providers before providing credit assistance for consumer leases 260
138........................ Obligations of credit assistance providers before providing credit assistance for consumer leases 260
139........................ Preliminary assessment of unsuitability of the consumer lease 261
140........................ Reasonable inquiries etc. about the consumer................. 261
141........................ When the consumer lease must be assessed as unsuitable—entering lease 262
142........................ When the consumer lease must be assessed as unsuitable—remaining in lease 264
143........................ Providing the consumer with the preliminary assessment 265
Division 5—Fees, indirect remuneration etc. relating to consumer leases 267
144........................ Fees, indirect remuneration etc. relating to consumer leases 267
145........................ No profiting from fees etc. paid to third parties.............. 268
Division 6—Prohibition on suggesting, or assisting with, unsuitable consumer leases 269
146........................ Prohibition on suggesting, or assisting with, unsuitable consumer leases 269
147........................ Prohibition on suggesting to consumers to remain in unsuitable consumer leases 271
Division 7—Special rules for consumer leases for household goods 274
147A..................... Licensee who makes representations about credit assistance in relation to consumer leases for household goods must display and give information....................... 274
147B...................... Written documentation required in relation to the preliminary assessment for a consumer lease for household goods.............................................................................. 275
Part 3‑4—Licensees that are lessors under consumer leases 277
Division 1—Introduction 277
148........................ Guide to this Part............................................................ 277
Division 2—Credit guide of lessors 278
149........................ Credit guide of lessors.................................................... 278
150........................ Credit guide of lessors who are assignees...................... 279
Division 3—Obligation to assess unsuitability 281
151........................ Obligation to assess unsuitability.................................... 281
152........................ Assessment of unsuitability of the consumer lease......... 281
153........................ Reasonable inquiries etc. about the consumer................. 281
154........................ When consumer lease must be assessed as unsuitable.... 282
155........................ Giving the consumer the assessment.............................. 284
Division 4—Prohibition on entering unsuitable consumer leases 286
156........................ Prohibition on entering unsuitable consumer leases........ 286
Division 5—Special rules for consumer leases for household goods 288
156A..................... Licensee who makes representations about consumer leases for household goods must display and give information..................................................................... 288
156B...................... Licensee must not enter into a consumer lease for household goods if the payments do not meet the prescribed requirements................................................................... 289
156C...................... Written documentation required in relation to the assessment for a consumer lease for household goods........................................................................................ 290
Part 3‑5—Credit representatives 291
Division 1—Introduction 291
157........................ Guide to this Part............................................................ 291
Division 2—Credit guide of credit representatives 292
158........................ Credit guide of credit representatives.............................. 292
Part 3‑5A—Mortgage brokers and mortgage intermediaries 295
Division 1—Introduction 295
Subdivision A—Guide to this Part 295
158K...................... Guide to this Part............................................................ 295
Subdivision B—Interpretation 295
158KA................... Doing acts....................................................................... 295
158KB................... Circumstances in which a secondary representative is taken to be acting within actual or apparent authority........................................................................................ 296
158KC................... Obligations under this Part in addition to other obligations 296
Division 2—Best interests obligations 297
Subdivision A—Licensees that provide credit assistance in relation to credit contracts 297
158L...................... Application of this Subdivision...................................... 297
158LA................... Licensee must act in the best interests of the consumer... 297
158LB................... Conflict between consumer’s interests and those of the licensee etc. 297
Subdivision B—Credit representatives that provide credit assistance in relation to credit contracts 298
158LD................... Application of this Subdivision...................................... 298
158LE.................... Credit representative must act in the best interests of the consumer 298
158LF.................... Conflict between consumer’s interests and those of the credit representative etc. 298
Division 4—Conflicted remuneration 300
Subdivision A—What is conflicted remuneration? 300
158N..................... Conflicted remuneration................................................. 300
158NA.................. Regulations may further define conflicted remuneration 300
Subdivision B—Ban on accepting conflicted remuneration 301
158NB................... Licensee must not accept conflicted remuneration........... 301
158NC................... Credit representative must not accept conflicted remuneration 301
Subdivision C—Ban on giving conflicted remuneration 301
158ND.................. Employer must not give employees conflicted remuneration 301
158NE................... Credit provider must not give conflicted remuneration... 302
158NF................... Mortgage intermediary must not give conflicted remuneration 302
Division 6—Miscellaneous 304
158T...................... Anti‑avoidance................................................................ 304
Part 3‑6—Debt collectors 305
Division 1—Introduction 305
159........................ Guide to this Part............................................................ 305
Division 2—Credit guide of debt collectors 306
160........................ Credit guide of debt collectors........................................ 306
Part 3‑6A—Miscellaneous rules 308
Division 1—Introduction 308
160A..................... Guide to this Part............................................................ 308
Division 2—Representations 309
160B...................... “Independent”, “impartial” or “unbiased” etc.................. 309
160C...................... “Financial counsellor” etc............................................... 310
Division 2A—Use or disclosure of certain documents and information 312
160CA................... Application of this Division............................................ 312
160CB................... Prohibition on use or disclosure of certain documents and information 312
Division 3—Giving misleading information 315
160D..................... Prohibition on giving misleading information etc........... 315
Division 4—Giving authorisation for deductions by employer of debtor or lessee 316
160E...................... Requirements for giving authorisation to employer........ 316
Division 5—Periods for determining unsuitability in respect of credit card contracts 318
160F...................... Periods for determining unsuitability in respect of credit card contracts 318
Division 6—Proscribed referrals 319
160G..................... Prohibition on proscribed referrals................................. 319
Part 3‑7—Exemptions and modifications relating to this Chapter 321
Division 1—Introduction 321
161........................ Guide to this Part............................................................ 321
Division 2—Exemptions and modifications relating to this Chapter 322
162........................ Provisions to which this Part applies.............................. 322
163........................ Exemptions and modifications by ASIC......................... 322
164........................ Exemptions and modifications by the regulations........... 323
Chapter 4—Remedies 325
Part 4‑1—Civil penalty provisions 325
Division 1—Introduction 325
165........................ Guide to this Part............................................................ 325
Division 2—Declarations and pecuniary penalty orders for contraventions of civil penalty provisions 326
166........................ Declaration of contravention of civil penalty provision... 326
167........................ Court may order person to pay pecuniary penalty for contravening civil penalty provision 326
167A..................... Maximum pecuniary penalty........................................... 327
167B...................... Pecuniary penalty applicable........................................... 328
167C...................... Relinquishing the benefit derived from contravening a civil penalty provision 329
167D..................... Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision........................................................................................ 330
Division 3—General provisions relating to civil penalty provisions 331
168........................ Contravening a civil penalty provision is not an offence. 331
169........................ Attempt and involvement in contravention treated in same way as actual contravention 331
170........................ Civil evidence and procedure rules for proceedings relating to civil penalty provisions 331
171........................ Criminal proceedings before civil proceedings............... 331
172........................ Criminal proceedings during civil proceedings............... 331
173........................ Criminal proceedings after civil proceedings.................. 332
174........................ Evidence given in proceedings for pecuniary penalty not admissible in criminal proceedings 332
175........................ Civil double jeopardy...................................................... 333
175A..................... Continuing contraventions of civil penalty provisions.... 333
175B...................... State of mind................................................................... 334
175C...................... Mistake of fact................................................................ 334
175D..................... Exceptions etc. to civil penalty provisions—burden of proof.. 335
175E...................... Civil penalty provisions contravened by employees, agents or officers 335
Part 4‑2—Power of the court to grant remedies 337
Division 1—Introduction 337
176........................ Guide to this Part............................................................ 337
Division 2—Power of the court to grant remedies 338
177........................ Injunctions...................................................................... 338
178........................ Compensation orders...................................................... 339
179........................ Other orders to compensate loss or damage.................... 340
180........................ Orders in relation to unlawful credit activities................. 343
180A..................... Orders to remedy unfair or dishonest conduct by credit service providers 345
181........................ Preference must be given to compensate consumers....... 348
182........................ Adverse publicity orders................................................. 349
183........................ Relief from liability for contravention of civil penalty provision 349
184........................ Multiple remedies may be granted.................................. 350
Part 4‑3—Jurisdiction and procedure of courts 351
Division 1—Introduction 351
185........................ Guide to this Part............................................................ 351
Division 2—Civil proceedings 352
Subdivision A—Application of this Division 352
186........................ Application of this Division............................................ 352
Subdivision B—Conferral of civil jurisdiction 352
187........................ Civil jurisdiction of courts.............................................. 352
188........................ Jurisdiction—decisions to prosecute and related criminal justice process decisions made by Commonwealth officers............................................................................ 353
189........................ Cross‑jurisdictional appeals............................................ 355
190........................ Courts to act in aid of each other..................................... 356
Subdivision C—Transfers between courts 356
191........................ Transfers—application of Subdivision........................... 356
192........................ Transfers—exercise of transfer power............................ 357
193........................ Transfers—criteria for transfer....................................... 358
194........................ Transfers—how initiated................................................ 359
195........................ Transfers—documents and procedure............................ 359
196........................ Transfers—conduct of proceedings................................ 360
197........................ Transfers—entitlement to practise as a lawyer................ 360
198........................ Transfers—limitation on appeals.................................... 360
Subdivision D—Other matters 361
199........................ Plaintiffs may choose small claims procedure................. 361
200........................ Costs only if proceedings brought vexatiously etc.......... 366
201........................ Civil proceedings not to be stayed.................................. 367
202........................ Standard of proof in civil proceedings............................ 367
Division 3—Criminal proceedings 368
Subdivision A—Application of this Division 368
203........................ Application of this Division............................................ 368
Subdivision B—Conferral of criminal jurisdiction 368
204........................ Criminal jurisdiction of courts........................................ 368
205........................ Criminal proceedings—laws to be applied...................... 371
206........................ Criminal proceedings—how taken.................................. 372
207........................ Certain persons to assist in prosecutions........................ 372
208........................ Privilege against self‑incrimination not available to bodies corporate in criminal proceedings 373
Division 4—Proceedings generally 375
209........................ ASIC’s power to intervene in proceedings..................... 375
210........................ Evidence of contravention............................................... 375
211........................ Power of court to punish for contempt of court.............. 376
Chapter 5—Administration 377
Part 5‑1—Matters relating to handling records and information 377
Division 1—Introduction 377
212........................ Guide to this Part............................................................ 377
Division 1A—The Registrar 378
Subdivision A—The Registrar 378
212A..................... Appointment of the Registrar.......................................... 378
212B...................... Functions........................................................................ 378
212C...................... Powers............................................................................ 378
212D..................... Directions by Minister.................................................... 379
212E...................... Delegation....................................................................... 379
212F...................... Assisted decision making............................................... 380
212G..................... Liability for damages...................................................... 380
Subdivision B—How the Registrar is to perform and exercise functions and powers 381
212H..................... Data standards................................................................ 381
212J....................... Giving information to the Registrar................................ 382
212K...................... How the Registrar is to perform and exercise functions and powers 382
Subdivision C—Disclosure of information 383
212L...................... Disclosure framework.................................................... 383
212M..................... Protection of confidentiality of protected information..... 384
212N..................... Authorisation of recording or disclosure........................ 385
212P...................... Preventing disclosure of particular protected information 386
212Q..................... Authorisation for purposes of Privacy Act..................... 387
212R...................... Disclosure to a court....................................................... 387
Subdivision D—Miscellaneous 387
212S...................... Extracts of information to be admissible in evidence...... 387
212T...................... Annual report.................................................................. 388
212U..................... Rules............................................................................... 388
Division 2—Registers relating to credit activities 390
213........................ Credit registers................................................................ 390
214........................ Inspection and public availability of credit registers........ 391
Part 5‑2—Documents lodged with ASIC or required by this Act 392
Division 1—Introduction 392
215........................ Guide to this Part............................................................ 392
Division 2—Lodgment of documents with ASIC 393
216........................ When documents are lodged with ASIC......................... 393
217........................ Approved forms for documents to be lodged with ASIC 393
218........................ ASIC may refuse to receive document etc...................... 394
Division 3—ASIC’s register of documents 396
219........................ Register of documents lodged with ASIC...................... 396
220........................ ASIC may require person to give information for document registers 396
221........................ Written document setting out information from document registers is prima facie evidence of matters 397
Division 4—Other provisions relating to documents lodged with ASIC or required under this Act 399
222........................ Certified copy or extract of document lodged with ASIC is admissible in evidence 399
223........................ ASIC may destroy or dispose of certain documents....... 399
224........................ Court may order lodgment of document etc.................... 399
225........................ False or misleading documents....................................... 400
Part 5‑3—Concealment or falsification of credit books 404
Division 1—Introduction 404
226........................ Guide to this Part............................................................ 404
Division 2—Prohibitions relating to the concealment or falsification of credit books 405
227........................ Concealing etc. of credit books....................................... 405
228........................ Falsification of credit books............................................ 406
229........................ Precautions against falsification of credit books............. 407
Part 5‑4—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 408
Division 1—Introduction 408
230........................ Guide to this Part............................................................ 408
Division 2—Fees imposed by the National Consumer Credit Protection (Fees) Act 2009 409
231........................ Fees are payable to the Commonwealth.......................... 409
232........................ Lodgment of document without payment of fee.............. 409
233........................ Doing act without payment of fee................................... 409
234........................ Effect of sections 232 and 233........................................ 409
235........................ Waiver and refund of fees............................................... 410
236........................ Debts due to the Commonwealth.................................... 410
237........................ Payment of fee does not give right to inspect or search.. 410
Part 5‑5—Other administrative matters 411
Division 1—Introduction 411
238........................ Guide to this Part............................................................ 411
Division 1A—Codes of conduct 412
Subdivision A—Approved codes of conduct 412
238A..................... Approved codes of conduct............................................ 412
238B...................... Variations to approved codes of conduct........................ 413
238C...................... Review of approved codes of conduct............................ 414
238D..................... Obligation to comply with enforceable code provisions. 414
238E...................... Regulations..................................................................... 414
Subdivision B—Mandatory codes of conduct 415
238F...................... Mandatory codes of conduct........................................... 415
238G..................... Obligation to comply with mandatory code of conduct... 415
Division 2—Other administrative matters 416
239........................ ASIC has general administration of this Act................... 416
240........................ Obstructing or hindering ASIC etc................................. 416
242........................ ASIC may arrange for use of computer programs to make decisions 416
243........................ Qualified privilege for information given to ASIC......... 417
244........................ ASIC certificate is prima facie evidence of matters......... 417
245........................ Operator of AFCA scheme may give information to ASIC 418
Chapter 6—Compliance and enforcement 419
Part 6‑1—Investigations 419
Division 1—Introduction 419
246........................ Guide to this Part............................................................ 419
Division 2—Investigations 420
247........................ General powers of investigation..................................... 420
248........................ Minister may direct investigations.................................. 420
249........................ Interim report on investigation........................................ 421
250........................ Final report on investigation........................................... 422
251........................ Distribution of report...................................................... 422
Part 6‑2—Examination of persons 424
Division 1—Introduction 424
252........................ Guide to this Part............................................................ 424
Division 2—Examination of persons 425
253........................ Notice requiring appearance for examination.................. 425
254........................ Proceedings at examination............................................. 425
255........................ Requirements made of examinee..................................... 425
256........................ Examination to take place in private................................ 426
257........................ Examinee’s lawyer may attend........................................ 426
258........................ Record of examination.................................................... 427
259........................ Giving to other persons copies of record........................ 428
260........................ Copies given subject to conditions.................................. 428
261........................ Record to accompany report........................................... 429
Part 6‑3—Inspection of books and audit information‑gathering powers 430
Division 1—Introduction 430
262........................ Guide to this Part............................................................ 430
Division 2—Inspection of books and audit information‑gathering powers 431
263........................ When certain powers may be exercised.......................... 431
264........................ ASIC may inspect books without charge........................ 431
265........................ Notice to auditors concerning information and books..... 432
266........................ Notice to produce books about credit activities or credit reporting 433
267........................ Notice to produce documents in person’s possession..... 434
268........................ ASIC may authorise persons to require production of books, giving of information etc. 435
271........................ Powers if books produced or seized............................... 436
272........................ Powers if books not produced........................................ 437
Part 6‑3A—Search warrants 438
Division 1—Introduction 438
272A..................... Guide to this Part............................................................ 438
Division 2—Extra application of Crimes Act search warrant provisions 439
Subdivision A—Basic extra application 439
272B...................... Extra application of Crimes Act search warrant provisions 439
272C...................... Interpretation of modifications........................................ 440
Subdivision B—Modifications 440
272D..................... Major modifications—evidential material....................... 440
272E...................... Major modifications—who may apply for a warrant etc. 440
272F...................... Major modifications—purposes for which things may be used and shared 441
272G..................... Minor modifications....................................................... 445
Part 6‑4—Proceedings after an investigation 447
Division 1—Introduction 447
273........................ Guide to this Part............................................................ 447
Division 2—Proceedings after an investigation 448
274........................ ASIC may prosecute....................................................... 448
275........................ ASIC may bring civil proceedings.................................. 449
Part 6‑5—Hearings 450
Division 1—Introduction 450
276........................ Guide to this Part............................................................ 450
Division 2—Hearings 451
277........................ Power to hold hearings................................................... 451
278........................ General discretion to hold hearing in public or private.... 451
279........................ Request by person appearing at hearing that it take place in public 451
280........................ Certain hearings to take place in private.......................... 452
281........................ ASIC may restrict publication of certain material............ 452
282........................ Who may be present when hearing takes place in private 453
283........................ Involvement of person entitled to appear at hearing........ 454
284........................ Power to summon witnesses and take evidence.............. 454
285........................ Proceedings at hearings.................................................. 455
286........................ ASIC to take account of evidence and submissions........ 456
287........................ Reference to court of question of law arising at hearing. 456
288........................ Protection of ASIC members etc.................................... 457
Part 6‑5A—Penalties for offences 458
Division 1—Introduction 458
288A..................... Guide to this Part............................................................ 458
Division 2—Penalty for committing an offence 459
288B...................... Penalty for committing an offence.................................. 459
288C...................... Penalty applicable to an offence committed by an individual 459
288D..................... Penalty applicable to an offence committed by a body corporate 460
288E...................... Meaning of benefit derived and detriment avoided because of an offence 461
288F...................... Where is the penalty for an offence specified?................ 461
288G..................... If no penalty is specified................................................. 462
Part 6‑5B—Infringement notices 463
Division 1—Introduction 463
288H..................... Guide to this Part............................................................ 463
Division 2—Infringement notices 464
288J....................... When an infringement notice may be given.................... 464
288K...................... Provisions subject to an infringement notice................... 464
288L...................... Matters to be included in an infringement notice............. 465
288M..................... Payment period............................................................... 468
288N..................... Extension of time to pay amount..................................... 469
288P...................... Payment by instalments.................................................. 470
288Q..................... Withdrawal of an infringement notice............................. 471
288R...................... Effect of payment of amount........................................... 473
288S...................... Effect of this Part............................................................ 474
Part 6‑6—Offences under this Chapter 475
Division 1—Introduction 475
289........................ Guide to this Part............................................................ 475
Division 2—Offences 476
290........................ Contraventions of requirements made under this Chapter 476
291........................ False information............................................................ 477
293........................ Disrupting hearings........................................................ 477
294........................ Concealing books relevant to investigation..................... 478
295........................ Self‑incrimination........................................................... 478
296........................ Legal professional privilege............................................ 479
297........................ Powers of court relating to contraventions of this Chapter 480
Part 6‑7—ASIC’s powers in relation to contraventions of this Chapter 482
Division 1—Introduction 482
298........................ Guide to this Part............................................................ 482
Division 2—ASIC’s powers in relation to contraventions of this Chapter 483
299........................ Application of this Part................................................... 483
300........................ Orders by ASIC relating to credit contracts, mortgages, guarantees or consumer leases 483
301........................ Orders under this Part..................................................... 484
Part 6‑7A—Product intervention orders 485
Division 1—Introduction 485
301A..................... Guide to this Part............................................................ 485
Division 2—Product intervention orders 486
301B...................... Definitions...................................................................... 486
301C...................... Application of product intervention orders..................... 486
301D..................... ASIC may make product intervention orders.................. 486
301E...................... Significant detriment to consumers................................. 488
301F...................... ASIC to consult before making product intervention orders 489
301G..................... Commencement and duration of product intervention orders 489
301H..................... Extension of product intervention orders........................ 490
301J....................... Amendment of product intervention orders.................... 491
301K...................... Revocation of product intervention orders...................... 492
301L...................... ASIC to issue public notice of product intervention orders 492
301M..................... Remaking product intervention orders............................ 494
301N..................... Product intervention orders may require notification...... 494
301P...................... Enforcement of product intervention orders.................... 494
Part 6‑8—Evidentiary use of certain material 496
Division 1—Introduction 496
302........................ Guide to this Part............................................................ 496
Division 2—Evidentiary use of certain material 497
303........................ Statements made at an examination: proceedings against examinee 497
304........................ Statements made at an examination: other proceedings... 498
305........................ Weight of evidence admitted under section 304.............. 498
306........................ Objection to admission of statements made at examination 499
307........................ Copies of, or extracts from, certain books...................... 500
308........................ Report under Part 6‑1..................................................... 501
309........................ Exceptions to admissibility of report............................... 501
310........................ Material otherwise admissible......................................... 502
Part 6‑9—Miscellaneous provisions relating to compliance and enforcement 503
Division 1—Introduction 503
311........................ Guide to this Part............................................................ 503
Division 2—Miscellaneous provisions relating to compliance and enforcement 504
312........................ Requirement made of a body corporate........................... 504
313........................ Evidence of authority...................................................... 504
314........................ Giving documents to natural persons.............................. 504
315........................ Place and time for production of books.......................... 505
316........................ Application of Crimes Act and Evidence Act................. 505
317........................ Allowances and expenses............................................... 505
318........................ Expenses of investigation under Part 6‑1........................ 506
319........................ Recovery of expenses of investigation............................ 506
320........................ Compliance with this Chapter......................................... 507
321........................ Effect of this Chapter...................................................... 507
322........................ Enforcement of undertakings.......................................... 507
An Act relating to credit, and for related purposes
Chapter 1—Introduction
Part 1‑1—Introduction
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 1‑2—Definitions
Division 1—Introduction
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 2—The 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).
avoidance purpose: see subsection 323A(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.
constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.
constitutional trade and commerce means trade and commerce:
(a) between Australia and places outside Australia; or
(b) between the States; or
(c) between a State and a Territory; or
(d) between 2 Territories; or
(e) within a Territory.
constrained document: see subsection 160CA(1).
constrained information: see subsection 160CA(1).
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.
consumer lease for household goods has the same meaning as in section 204 of the National Credit Code.
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 hardship information has the same meaning as in the Privacy Act 1988.
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.
hardship notice has the same meaning as in section 204 of the National Credit Code.
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.
household goods has the same meaning as in section 204 of the National Credit Code.
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.
proscribed referral: see subsection 160G(2).
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).
repayment date: see subsection 133CD(3).
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.
scheme means:
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied; or
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise; or
(c) any combination of 2 or more things that are schemes because of paragraph (a) or (b).
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.
unsolicited communication to a consumer: see subsection 133CF(2).
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 3—Definitions 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 4—Other 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 1‑3—Application of this Act and the Transitional Act
Division 1—Introduction
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 2—Constitutional 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 3—Interaction 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 2—Licensing of persons who engage in credit activities
Part 2‑1—Requirement to be licensed to engage in credit activities
Division 1—Introduction
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 2—Engaging 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 3—Other 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 2‑2—Australian credit licences
Division 1—Introduction
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 2—Australian 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 3—How 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 4—Conditions 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 5—Obligations of licensees
Subdivision A—General 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 B—Providing 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:
(i) covered by paragraph (d) of the definition of credit legislation in subsection 5(1); and
(ii) specified in regulations made for the purposes of this subparagraph;
(d) an obligation of a representative of the licensee under this Act, the Transitional Act, Division 2 of Part 2 of the ASIC Act or regulations made for the purpose of that Division.
(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.
(5A) Regulations for the purposes of paragraph (4)(b) may prescribe a civil penalty provision to the extent that it relates to the following:
(a) contraventions of specified provisions;
(b) specified matters.
(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 C—Notifying 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 D—Miscellaneous
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 6—When a licence can be suspended, cancelled or varied
Subdivision A—Suspensions 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