The key steps to apply for a credit licence are:
- choosing your Responsible Managers
- prepare your proof documents for ASIC
- answer to ASIC’s requests for further information
- ongoing maintenance and compliance
If you want to know whether you need a Credit Licence. Please check out our article on “Do I need an Australian credit licence?”.
Choosing your Responsible Manager
When nominating Responsible Managers (RMs) in your application, you must ensure the RMs have the required skills and experience to demonstrate organisational competence for each authorisation your business seeks.
ASIC generally requires RMs to meet the following criteria:
- at least 2 years of experience in credit activities, without any issues, under another Australian Credit Licence or as a credit representative; and
- an appropriate qualification in the credit industry – the qualifications will vary depending on the type of licence being applied for.
Proof Documents
The documents you submit to ASIC for your credit licence application are called “Proof Documents”, which include:
- business description
- people proofs for each nominated RMs, including:
- police checks
- bankruptcy checks
- qualification checks
- background checks for all individuals deemed fit and proper, including directors, secretaries, senior managers, controlling shareholders, officeholders of any corporate controllers etc.
- fit and proper people proof
Further Information
After submitting your application to ASIC, they often require more information from you. It often involves the following steps:
- Lodgement – ASIC analyst is appointed and they would do an initial check to ensure all proof documents are received.
- Requisition – ASIC analyst assesses and asks you for further information.
- Draft licence – You will receive a draft credit licence along with any final requisitions.
- Final licence – When all requisitions are satisfied, ASIC will issue the final credit licence.
Ongoing Maintenance
Credit Licensee Portal
All licensees are required to register for online access through the Credit Licensee portal. This portal enables you to manage various aspects of your licence, such as updating your address, Responsible Managers, authorisations, and credit representatives. It is essential to keep your contact details current to ensure that all communications from ASIC reach the correct individual.
ASIC Connect
The ASIC Connect portal enables you to add a Business Name or ABN. The ASIC Regulatory Portal provides access to a variety of regulatory services. This portal is used for lodging breaches and submitting ASIC industry funding metrics.
Companies Portal
This portal enables officeholders, or their agents, to update company details, including changes to the address, officeholders, shareholders, and share structure.
Australian Financial Complaints Authority (AFCA)
When you apply for a credit licence, you must be a member of AFCA, which is the external dispute resolution scheme for financial complaints in Australia.
Enrol with AUSTRAC
Any entity offering designated services must register with AUSTRAC within 28 days of beginning their operations. Enrolment forms can be completed through AUSTRAC Online.
Appoint Credit Representatives
Credit licensees must inform ASIC of any Credit Representative appointments within 15 business days via the ASIC Connect portal. Additionally, any changes to the details of a Credit Representative must be reported to ASIC within 15 business days.
Establish Compliance Procedures
It is crucial to establish compliance procedures now to ensure you meet your ongoing compliance obligations.
Insurance
Before ASIC grants your licence, you must demonstrate that you have adequate professional indemnity insurance in place. You are also required to complete a questionnaire about your professional indemnity insurance and provide ASIC with a certificate of currency.
Commence Operations – Provide services within 6 months
Credit licensees are required to start their credit services business within 6 months of receiving their final Australian Credit Licence. If the licensee does not begin operations within this period, ASIC has the authority to cancel the licence. However, credit licensees can apply to ASIC for an extension of this deadline if they have valid reasons for the delay.
Reference:
Australian Securities & Investments Commission – RG 204 Apply for and varying a credit licence issued 22 October 2020
