National Consumer Credit Protection Act 2009

CHAPTER 1 - INTRODUCTION  

PART 1-1 - INTRODUCTION  

SECTION 1   1   SHORT TITLE  
This Act may be cited as the National Consumer Credit Protection Act 2009.

SECTION 2   COMMENCEMENT  

2(1)   [Commencement dates]  

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

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(2)   [Information which may be changed]  

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.

SECTION 3   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  

SECTION 4   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  

SECTION 5   THE DICTIONARY  

5(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.

approved external dispute resolution scheme
(Repealed by No 13 of 2018, s 3 and Sch 1[63], effective 6 March 2018. For application provision, see note under s 11.)

APRA
means the Australian Prudential Regulation Authority.

ASIC
means the Australian Securities and Investments Commission.

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

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

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

associate
: see section 15A.

Australia
(Repealed by No 154 of 2020, s 3 and Sch 2[56], effective 2 August 2021.)

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

Australian credit licence
: see subsection 35(1).

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

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

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

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

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

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


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


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


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


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

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

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

benefit derived and detriment avoided
:


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


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

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

book
includes:


(a) a register; and


(b) any other record of information; and


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


(d) a document.

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

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

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


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


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

coastal sea
:


(a) in relation to Australia - means:


(i) the territorial sea of Australia; and

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

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


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

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


(a) licensees; or


(b) credit representatives;
being activities in relation to which ASIC has a regulatory responsibility.

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

Note:

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

Commonwealth body
means:


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


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


(c) a person:


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

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

Commonwealth credit legislation
means this Act and the Transitional Act.

conflicted remuneration
: see sections 158N and 158NA.

consumer
means a natural person or a strata corporation.

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

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

contravention

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


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

control
has the meaning given by section 16A.

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

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

credit activity
: see section 6.

credit assistance
: see section 8.

credit book
: see subsection 227(4).

credit card
: see subsection 133BA(2).

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

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

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

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

credit legislation
means:


(a) this Act; and


(b) the Transitional Act; and


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


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

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

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

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

credit provider
:


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


(b) otherwise - has the same meaning as in section 204 of the National Credit Code, and includes a person who is a credit provider because of section 10 of this Act.

credit registers
: see section 213.

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

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

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

credit service
: see section 7.

criminal procedure
: see section 205.

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

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

declaration of contravention
means a declaration made under section 166.

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

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

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

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

document registers
: see section 219.

eligible credit account
: see section 133CO.

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

eligible licensee
: see subsection 133CN(1).

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

engage in conduct
means:


(a) do an act; or


(b) omit to perform an act.

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

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

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

Federal Circuit Court
(Repealed by No 13 of 2021, s 3 and Sch 2[602], effective 1 September 2021.)

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.

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

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

indirect remuneration
means a commission or conflicted remuneration.

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

infringement notice
means a notice given under section 288J.

initial National Credit Act
(Repealed by No 9 of 2010, s 3 and Sch 1[1].)

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

initial Transitional Act
(Repealed by No 9 of 2010, s 3 and Sch 1[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.

mortgage intermediary
: see section 15C.

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

mortgagor
means the mortgagor under a mortgage.

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


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


(b) instruments made under that Schedule.

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

official employment
means:


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


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

Part 3-2CA body
: see section 133CZF.

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

pecuniary penalty order
means an order made under section 167.

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

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

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

power
includes an authority.

premises
includes:


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


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


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

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

proceedings
:


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


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

protected information
means information:


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


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


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

(ii) under another law of the Commonwealth;
in connection with particular functions or powers of the Registrar.

qualified privilege
has a meaning affected by section 16.

receiving court
: see section 191.

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

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

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

referred credit matter
: see subsection 20(1).

referring State
: see section 19.

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

Registrar
has the meaning given by section 16B.

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

related criminal justice process decision
: see section 188.

relevant criminal law
: see subsection 204(5).

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


(a) if the lower court is the Federal Circuit and Family Court of Australia (Division 2) - the Federal Court; or


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

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

reportable situation
has the meaning given by section 50A.

representative
of a person means:


(a) if the person is a licensee:


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

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

(iii) a credit representative of the licensee; or

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


(b) otherwise:


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

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

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

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

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

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

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

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

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

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


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


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

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


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


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


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


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


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

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


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


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


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


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


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


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

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

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

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

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


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


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

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


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


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

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

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

subscriber
, in relation to an approved code of conduct:


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


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

superior court
means any of thefollowing 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 otherbody, authority or person in Australia having power, by law or by consent of parties, to hear, receive or examine evidence.

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

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

value of a credit contract, mortgage, guarantee or consumer lease
(Repealed by No 130 of 2012, s 3 and Sch 5[2])

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.

5(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  

SECTION 6   MEANING OF CREDIT ACTIVITY  

6(1)   [Examples of engaging in credit activity]  

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.

6(2)   [Subclasses of conduct]  

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).

SECTION 7   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.

SECTION 8   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.

SECTION 9   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.

SECTION 10   ASSIGNEES OF CREDIT PROVIDERS, LESSORS, MORTGAGEES AND BENEFICIARIES OF A GUARANTEE  

10(1)   [Interpretation]  

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).

10(2)   [Assignment or passing by law of rights]  

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  

SECTION 11   11   MEANING OF APPROVED EXTERNAL DISPUTE RESOLUTION SCHEME  
(Repealed by No 13 of 2018)

SECTION 12   WHEN A BUSINESS IS CARRIED ON IN THIS JURISDICTION  

12(1)   [Application of Div 3 of Pt 1.2 of Corporations Act 2001 ]  

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 .

12(2)   [Interpretation of "carried on in this jurisdiction"]  

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.

SECTION 13   MEANING OF MISLEADING  

13(1)   [When representations are misleading]  

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.

13(2)   [No limitation]  

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

SECTION 14   MEANING OF PERSON - GENERALLY INCLUDES A PARTNERSHIP  

14(1)   [Changes to Act when applied to partnerships]  

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.

14(2)   [Change in partnership composition does not affect continuity]  

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.

14(3)   [Subsections have effect subject to contrary intention and regulations]  

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.

SECTION 15   MEANING OF PERSON - GENERALLY INCLUDES MULTIPLE TRUSTEES  

15(1)   [Application]  

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.

15(2)   [Act applies as if trustee or trustees were single person]  

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.

15(3)   [Changes to Act where trust has 2 or more trustees]  

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.

15(4)   [Changes to Act where trust has 1 trustee]  

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.

15(5)   [Subsections have effect subject to contrary intention and regulations]  

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.

SECTION 15A   MEANING OF ASSOCIATE  

15A(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.

15A(2)  
In any other case, a person is an associate of another person in the circumstances prescribed by the regulations.

SECTION 15B   MEANING OF MORTGAGE BROKER  

15B(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.

15B(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.

SECTION 15C   MEANING OF MORTGAGE INTERMEDIARY  

15C(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.

15C(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.

SECTION 16   QUALIFIED PRIVILEGE  

16(1)   [Qualified privilege for defamation]  

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.

16(2)   [Definition of "malice"]  

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

16(3)   [No limit or affect on other right, privilege or immunity]  

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.

SECTION 16A   MEANING OF CONTROL  

16A(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).

16A(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).

16A(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.

SECTION 16B   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 - anyCommonwealth 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  

SECTION 17   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  

SECTION 18   CONSTITUTIONAL BASIS FOR THIS ACT AND THE TRANSITIONAL ACT   Application in a referring State

18(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

18(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

18(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

18(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.

SECTION 19   MEANING OF REFERRING STATE   Meaning of referring State

19(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.

19(2)   [Interpretation]  

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

19(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

19(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

19(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

19(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.

19(7)   [When State does not cease to be referring State]  

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

19(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.

initial reference
(Repealed by No 9 of 2010, s 3 and Sch 1[12], effective 3 March 2010.)

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.

SECTION 20   MEANING OF REFERRED CREDIT MATTER  

20(1)   [Definition of "referred credit matter"]  

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.

20(2)   [Definition of "initial national credit code"]  

Initial National Credit Code means Schedule 1 to the relevant version of this Act (within the meaning of subsection 19(8)).

SECTION 21   GENERAL APPLICATION OF THIS ACT AND THE TRANSITIONAL ACT   Application in this jurisdiction

21(1)  
Each provision of this Act and the Transitional Act applies in this jurisdiction. Geographical coverage of "this jurisdiction"

21(2)   [Definition of "this jurisdiction"]  

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).

21(3)   [Composition of "this jurisdiction"]  

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

21(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

21(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.

21(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.

SECTION 22   WHEN ACTS BIND CROWN  

22(1)   [Crown not bound by Act]  

This Act (other than the National Credit Code) and the Transitional Act do not bind the Crown in any of its capacities.

22(2)   [Regulations may bind crown]  

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.

22(3)   [National Credit Code binds Crown]  

The National Credit Code binds the Crown in each of its capacities.

22(4)   [Liability of crown]  

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  

SECTION 23   CONCURRENT OPERATION INTENDED  

23(1)   [No exclusion of concurrent laws]  

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.

23(2)   [Liability for convictions]  

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.

23(3)   [Inconsistency]  

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.

SECTION 24   WHEN COMMONWEALTH CREDIT LEGISLATION DOES NOT APPLY  

24(1)   [Application]  

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.

24(2)   [Exclusions]  

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.

24(3)   [Regulations may exclude application of subsection 2 to declaration]  

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.

SECTION 25   AVOIDING DIRECT INCONSISTENCY BETWEEN COMMONWEALTH AND STATE AND TERRITORY LAWS   This section overrides other Commonwealth credit legislation

25(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

25(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

25(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

25(4)   [Where displacement provision authorises or requires an act]  

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.

25(5)   [Inconsistency]  

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.

25(6)   [Regulations may exclude application]  

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.

SECTION 26   REGULATIONS TO DEAL WITH INTERACTION BETWEEN LAWS  

26(1)   [Regulations may modify Cth credit legislation]  

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.

26(2)   [Regulations made under subsection 1 may provide]  

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  

SECTION 27   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  

SECTION 28   28   APPLICATION OF THIS DIVISION  
This Division applies on or after 1 July 2011, or a later day prescribed by the regulations.

SECTION 29   PROHIBITION ON ENGAGING IN CREDIT ACTIVITIES WITHOUT A LICENCE   Prohibition on engaging in credit activities without a licence

29(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

29(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

29(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).

29(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  

SECTION 30   PROHIBITIONS ON HOLDING OUT AND ADVERTISING ETC.   Prohibitions on holding out and advertising etc.

30(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.

30(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

30(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.

SECTION 31   PROHIBITION ON CONDUCTING BUSINESS WITH UNLICENSED PERSONS   Prohibition on conducting business with unlicensed persons

31(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

31(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.

SECTION 32   PROHIBITION ON CHARGING A FEE ETC.   Prohibition on charging a fee etc.

32(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

32(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.

SECTION 33   33   PROHIBITION ON GIVING MISLEADING INFORMATION ETC.  
(Repealed by No 130 of 2012)

PART 2-2 - AUSTRALIAN CREDIT LICENCES  

Division 1 - Introduction  

SECTION 34   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  

SECTION 35   AUSTRALIAN CREDIT LICENCES  

35(1)   [Definition]  

An Australian credit licence is a licence that authorises the licensee to engage in particular credit activities.

35(2)   [Authorised activities specified in licence conditions]  

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  

SECTION 36   APPLYING FOR A LICENCE  

36(1)   [Application]  

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.

36(2)   [Approved form]  

The application must be in the approved form.

SECTION 37   WHEN A LICENCE MAY BE GRANTED - APPLICANTS OTHER THAN ADIs   When ASIC must grant a licence

37(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


(d) (Repealed)


(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

37(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.

37(3)  
(Repealed by No 3 of 2020)

ASIC may request information etc. from applicant

37(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.

37(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.

37(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.

37(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.

37(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.

SECTION 37A   FIT AND PROPER PERSON TEST  

37A(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.

37A(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.

SECTION 37B   FIT AND PROPER PERSON TEST - MATTERS TO WHICH ASIC MUST HAVE REGARD  

37B(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.

37B(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.

SECTION 38   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).

SECTION 39   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.

SECTION 40   LICENCES MUST NOT BE GRANTED TO CERTAIN APPLICANTS   Banning or disqualification order in force against person

40(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.

40(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.

SECTION 41   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.

SECTION 42   NOTICE OF GRANT OR REFUSAL OF LICENCE AND DATE OF EFFECT  

42(1)   [Form and content of notice]  

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.

42(2)   [Day on which licence comes into force]  

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.

SECTION 43   AUSTRALIAN CREDIT LICENCE NUMBERS  

43(1)   [Unique licence number must be allocated]  

ASIC must allocate each licence a unique Australian credit licence number when it is granted.

43(2)   [Credit licence number and financial services licence number to be same]  

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.

43(3)   [Written notice of licence number must be given]  

ASIC must give the licensee written notice of the Australian credit licence number.

SECTION 44   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  

SECTION 45   THE CONDITIONS ON THE LICENCE   ASIC may impose, vary or revoke conditions on licences

45(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.

45(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.

45(3)  
The application must be in the approved form. Notice and effect of imposition, variation or revocation of conditions

45(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

45(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

45(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

45(7)  
The licence is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.

SECTION 46   LICENCE CONDITIONS - SPECIAL PROCEDURES FOR APRA-REGULATED BODIES   Special procedures for APRA-regulated bodies (other than ADIs)

46(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

46(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.

SECTION 46A   ASIC MAY REQUEST INFORMATION ETC. IN RELATION TO AN APPLICATION FOR CONDITIONS TO BE VARIED  

46A(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.

46A(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

46A(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.

46A(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.

46A(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.

46A(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.

46A(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

46A(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  

SECTION 47   GENERAL CONDUCT OBLIGATIONS OF LICENSEES   General conduct obligations

47(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

47(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

47(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

47(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.

47(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

47(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.

47(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).

47(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

47(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.

47(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

47(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.

SECTION 48   REQUIREMENTS FOR COMPENSATION ARRANGEMENTS   Requirement to have adequate compensation arrangements

48(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

48(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

48(3)   [Matters to be consider before approval under para (2)(b)]  

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.

48(4)   [Regulations may prescribe additional details for 3(a) and (b)]  

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  

SECTION 49   OBLIGATION TO PROVIDE A STATEMENT OR OBTAIN AN AUDIT REPORT IF DIRECTED BY ASIC   Notice to licensee to provide a statement

49(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).

49(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

49(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.

49(4)  
A notice under subsection (3) is not a legislative instrument. Notice must specify day by which licensee must comply

49(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

49(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

49(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

49(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.

49(9)  
Subsection (8) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 50   OBLIGATION TO GIVE ASIC INFORMATION REQUIRED BY THE REGULATIONS   Regulations may require licensee to give information

50(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

50(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

50(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

50(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.

50(5)  
Subsection (4) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 50A   WHAT ARE REPORTABLE SITUATIONS?  

50A(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).

50A(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.

50A(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.

50A(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.

50A(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.

50A(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.

50A(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).

SECTION 50B   OBLIGATION TO LODGE A REPORT - REPORTABLE SITUATIONS IN RELATION TO THE LICENSEE  

Reporting a reportable situation to ASIC

50B(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

50B(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

50B(3)  
The report must be lodged with ASIC in writing in the approved form. Period within which report must be lodged

50B(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)

50B(5)  
Strict liability applies in relation to paragraphs (1)(a) and (b). If report is received by APRA

50B(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.

50B(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.

SECTION 50C   OBLIGATION TO LODGE A REPORT - REPORTABLE SITUATIONS IN RELATION TO OTHER LICENSEES  

Reporting a reportable situation to ASIC

50C(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

50C(2)  
The report must be lodged with ASIC in writing in the approved form. Period within which report must be lodged

50C(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

50C(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

50C(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.

50C(6)  
A licensee has qualified privilege in relation to a copy of a report given under subsection (5).

50C(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.

SECTION 50D   ASIC MUST PUBLISH DETAILS OF CERTAIN REPORTS  

50D(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.

50D(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.

50D(3)  
The regulations may prescribe circumstances in which information need not be included in the information published by ASIC under this section.

50D(4)  
ASIC may correct any error in, or omission from, information published under this section.

SECTION 51   OBLIGATION TO PROVIDE ASIC WITH ASSISTANCE IF REASONABLY REQUESTED   Requirement to provide assistance

51(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.

51(2)  
If the request is in writing, it is not a legislative instrument. Offence

51(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.

51(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  

SECTION 51A   REPORTING TO CONSUMERS AFFECTED BY A REPORTABLE SITUATION  

Notifying an affected consumer of a reportable situation

51A(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

51A(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

51A(3)  
A licensee has qualified privilege in relation to a notice given under this section.

51A(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.

SECTION 51B   OBLIGATION TO INVESTIGATE REPORTABLE SITUATIONS THAT MAY AFFECT CONSUMERS  

Obligation to investigate

51B(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

51B(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

51B(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

51B(4)  
The investigation must be completed as soon as is reasonably practicable after it is commenced. Notifying affected consumer

51B(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.

51B(6)  
A licensee has qualified privilege in relation to a notice given under subsection (5).

51B(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

51B(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

51B(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.

51B(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.

SECTION 51C   OBLIGATION TO KEEP RECORDS OF COMPLIANCE  

Obligation to keep records of compliance

51C(1)  
A licensee must keep records sufficient to enable the licensee's compliance with this Subdivision to be readily ascertained.

51C(2)  
The regulations may specify records that the licensee must keep as part of the obligation in subsection (1). Offence

51C(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  

SECTION 52   OBLIGATION TO CITE AUSTRALIAN CREDIT LICENCE NUMBER   When this section applies

52(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

52(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

52(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.

52(4)  
Subsection (3) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 53   OBLIGATION TO LODGE ANNUAL COMPLIANCE CERTIFICATE   Requirement to lodge annual compliance certificate

53(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

53(2)  
The compliance certificate must be in the approved form. Who must sign compliance certificate

53(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

53(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

53(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.

53(6)  
Subsection (5) is an offence of strict liability. Meaning of licensing anniversary

53(7)  
Licensing anniversary of a licensee means the anniversary of the day on which the licensee's licence came into force under section 42.

SECTION 53A   OBLIGATION TO NOTIFY ASIC OF CHANGE IN CONTROL  

Requirement to notify ASIC of change in control

53A(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

53A(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.

53A(3)  
Subsection (2) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 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

53B(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

53B(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.

53B(3)  
Subsection (2) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 53C   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  

SECTION 54   SUSPENSION OR CANCELLATION WITHOUT HEARING  

54(1)  
ASIC may suspend or cancel a licensees 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) anamount of shortfall penalty payable (if any) in relation to the levy.

54(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.

54(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.

54(3)  
An application for suspension or cancellation of a licence must be in the approved form.

SECTION 55   SUSPENSION OR CANCELLATION AFTER OFFERING A HEARING  

55(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 madeby the licensee under paragraph 45(2)(b) in relation to the licence:


(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter; or


(g) any information, audit report or statement lodged with ASIC in accordance with a request under subsection 46A(3) in relation to an application made by the licensee under paragraph 45(2)(b) in relation to the licence:


(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter.

55(2)-(3)  
(Repealed by No 3 of 2020)

55(4)  
ASIC may only suspend or cancel a licensee's licence under this section after giving the licensee an opportunity:


(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and


(b) to make submissions to ASIC on the matter.

SECTION 56   SUSPENSION AND CANCELLATION - SPECIAL PROCEDURES FOR APRA-REGULATED BODIES   Special procedures for APRA-regulated bodies (other than ADIs)

56(1)  
If a licensee, or a related body corporate, is a body (the APRA body ) regulated by APRA (other than an ADI), then the following provisions apply:


(a) ASIC cannot suspend or cancel the licensee's licence if doing so would, in ASIC's opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;


(b) if ASIC suspends or cancels the licensee's licence and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken. Special procedures for ADIs

56(2)  
If:


(a) a licensee is an ADI; or


(b) a related body corporate of a licensee is an ADI, and cancellation or suspension of the licensee's licence would, in ASIC's opinion, have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959);

then the following provisions have effect:


(c) subject to paragraph (d), the powers that ASIC would otherwise have under this Division to cancel or suspend the licensee's licence, or to revoke a suspension to which this subsection applied, are instead powers of the Minister;


(d) the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;


(e) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 55(4)(a) and receive any submissions under paragraph 55(4)(b).

Subdivision B - Variations  

SECTION 57   57   VARYING LICENCES  
ASIC may vary a person's licence to take account of a change in the person's name.

Note:

The conditions on the licence can be varied under section 45.

Subdivision C - Miscellaneous rules about suspensions, cancellations and variations  

SECTION 58   EFFECT OF SUSPENSION  

58(1)   [No effect while suspended]  

A suspended licence has no effect while it remains suspended.

58(2)   [Interpretation]  

Subsection (1) has effect subject to section 62 (which deals with the continued effect of some suspended or cancelled licences).

SECTION 59   59   REVOCATION OF SUSPENSION  
ASIC may at any time revoke the suspension of a licence.

SECTION 60   DATE OF EFFECT, NOTICE AND PUBLICATION OF VARIATION, CANCELLATION OR SUSPENSION ETC.  

60(1)   [Written notice must be given]  

ASIC must give a licensee written notice of a variation, suspension, revocation of a suspension, or cancellation of the licensee's licence.

60(2)   [In force when written notice given to licensee]  

A variation, suspension, revocation of a suspension, or cancellation of a licence comes into force when the written notice of that action is given to the licensee.

60(3)   [Publication]  

As soon as practicable after the notice is given to the licensee, ASIC must publish a notice of the action on ASIC's website. The notice must state when the action took effect.

SECTION 61   61   STATEMENT OF REASONS  
A notice of suspension or cancellation given to a licensee must be accompanied by a statement of reasons for the action taken.

SECTION 62   ASIC MAY ALLOW LICENCE TO CONTINUE IN FORCE  

62(1)   [ASIC may include terms in suspension or cancellation of licence]  

If ASIC gives a written notice of suspension or cancellation to a licensee, ASIC may include terms in the notice specifying that the licence continues in force as though the suspension or cancellation had not happened for the purposes of specified provisions of this Act in relation to specified matters, a specified period, or both.

62(2)   [Licence continues in force in accordance with terms]  

If ASIC includes terms in a notice under subsection (1), the licence continues in force in accordance with the terms of the notice.

PART 2-3 - CREDIT REPRESENTATIVES AND OTHER REPRESENTATIVES OF LICENSEES  

Division 1 - Introduction  

SECTION 63   GUIDE TO THIS PART  

This Part is about credit representatives of licensees (which are a particular type of representative of licensees). A person who is authorised as a credit representative of a licensee does not need to hold an Australian credit licence when engaging in credit activities on behalf of the licensee.

This Part also deals with information that ASIC may give to licensees about their representatives (such as their employees, directors and credit representatives, and persons who act on their behalf), and the liability of licensees for their representatives.

Division 2 deals with how a credit representative may be authorised to engage in credit activities on behalf of a licensee. It also deals with certain obligations of licensees in relation to the authorisation of their credit representatives.

Division 3 deals with information about representatives that ASIC may give to a licensee and the use of that information.

Division 4 deals with the liability of licensees for the conduct of their representatives.

Division 2 - Authorisation of credit representatives  

SECTION 64   LICENSEE MAY AUTHORISE CREDIT REPRESENTATIVES   Authorisation of credit representative by licensee

64(1)  
A licensee may give a person a written notice authorising the person to engage in specified credit activities on behalf of the licensee.

64(2)  
A person who is authorised under subsection (1) is a credit representative of the relevant licensee.

64(3)  
The credit activities specified may be some or all of the credit activities authorised by the licensee's licence. When authorisation is of no effect

64(4)  
The authorisation:


(a) is of no effect if subsection (5) applies to it when it is given; and


(b) ceases to have effect if and when subsection (5) starts to apply to it after it is given;

to the extent that subsection (5) applies.

64(5)  
This section applies to the authorisation to the extent that it purports to authorise:


(a) a person to engage in a credit activity that is not authorised by the licensee's licence; or


(b) a person to engage in a credit activity, and a banning order or disqualification order under Part 2-4 is in force against the person in relation to the credit activity; or


(c) a person who is not a member of the AFCA scheme; or


(d) a person who is banned from engaging in a credit activity under a law of a State or Territory; or


(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or


(f) a natural person against whom a prescribed State or Territory order is in force; or


(g) a person that is a body corporate, if a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities specified in the authorisation; or


(h) a person that is a partnership or the trustees of a trust, if a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities specified in the authorisation.

SECTION 65   CREDIT REPRESENTATIVE THAT IS A BODY CORPORATE MAY SUB-AUTHORISE NATURAL PERSONS AS CREDIT REPRESENTATIVES   Authorisation of natural person as credit representative by credit representative that is a body corporate

65(1)  
A body corporate that is a credit representative of a licensee may, in that capacity, give a natural person a written notice authorising that natural person to engage in specified credit activities on behalf of the licensee.

65(2)  
A natural person who is authorised under subsection (1) is a credit representative of the relevant licensee.

65(3)  
The credit activities specified may be some or all of the credit activities authorised by the licensee's licence. Licensee must give consent to authorisation

65(4)  
The authorisation can only be given if the licensee gives the body corporate its written consent to the authorisation. The licensee may give consent in relation to either a specified natural person or a specified class of natural persons (the membership of which might change from time to time). When authorisation is of no effect

65(5)  
The authorisation:


(a) is of no effect if subsection (6) applies to it when it is given; and


(b) ceases to have effect if and when subsection (6) starts to apply to it after it is given;

to the extent that subsection (6) applies.

65(6)  
This subsection applies to the authorisation to the extent that it purports to authorise:


(a) a natural person to engage in a credit activity that is not authorised by the licensee's licence; or


(b) a natural person to engage in a credit activity, and a banning order or disqualification order under Part 2-4 is in force against the natural person in relation to the credit activity; or


(c) a natural person who is not a member of the AFCA scheme; or


(d) a natural person who is banned from engaging in a credit activity under a law of a State or Territory; or


(e) a natural person who has been convicted, within the last 10 years, of serious fraud; or


(f) a natural person against whom a prescribed State or Territory order is in force; or


(g) a natural person in relation to the authorisation of whom the licensee has not given its written consent in accordance with subsection (4).

65(7)  
To avoid doubt, an authorisation under subsection (1) is taken, for the purposes of sections 66 to 72, to be given by the body corporate, not the licensee.

SECTION 66   CREDIT REPRESENTATIVE OF 2 OR MORE LICENSEES  

66(1)   [May be credit representative if consent or licensees related body corporate of each other licensee]  

One person can be the credit representative of 2 or more licensees, but only if:


(a) each of those licensees has consented to the person also being the credit representative of each of the other licensees; or


(b) each of the licensees is a related body corporate of each of the other licensees.

66(2)   [When authorisation has no effect]  

An authorisation:


(a) is of no effect if it contravenes subsection (1) when it is given; and


(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.

SECTION 67   A PERSON CANNOT BE A CREDIT REPRESENTATIVE IN RELATION TO CREDIT ACTIVITIES AUTHORISED BY A PERSON'S LICENCE  

67(1)   [Authorisation under subsection 64(1) or 65(1)]  

A person must not authorise another person to engage in a credit activity as a credit representative under subsection 64(1) or 65(1) if the other person holds a licence authorising the person to engage in the credit activity.

67(2)   [When authorisation has no effect]  

An authorisation:


(a) is of no effect if it contravenes subsection (1) when it is given; and


(b) ceases to have effect if and when it starts to contravene subsection (1) after it is given.

SECTION 68   VARIATION AND REVOCATION OF AUTHORISATIONS AND SUB-AUTHORISATIONS   Variation and revocation of authorisations

68(1)  
An authorisation under subsection 64(1) may be varied or revoked at any time by the licensee giving written notice to the credit representative. Variation and revocation of sub-authorisations

68(2)   [Varied or revoked by written notice from licensee or by body corporate]  

An authorisation under subsection 65(1) may be varied or revoked at any time by:


(a) the licensee in relation to whom the authorisation was given; or


(b) the body corporate that gave the authorisation;

giving written notice to the credit representative.

68(3)   [Written notice under subsection 2 to be given to all parties with power to vary or revoke authorisation]  

If a person varies or revokes an authorisation under subsection (2), that person must give the other person who could have varied or revoked the authorisation written notice of the variation or revocation.

SECTION 69   OBLIGATION NOT TO GIVE AUTHORISATION THAT HAS NO EFFECT   Requirement not to give authorisation

69(1)  


A person must not purport to authorise a credit representative under subsection 64(1) or 65(1) if, at the time the person first purports to give the authorisation, it is of no effect, to any extent, under this Division.

Civil penalty: 5,000 penalty units.

Offence

69(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.

SECTION 70   OBLIGATION TO VARY OR REVOKE AUTHORISATION THAT CEASES TO HAVE EFFECT   Requirement to vary or revoke authorisation

70(1)  
If a person:


(a) has authorised a credit representative under subsection 64(1) or 65(1); and


(b) becomes aware of a matter because of which the authorisation of the credit representative has ceased to have effect under this Division;

the person must, as soon as practicable:


(c) revoke the authorisation; or


(d) vary the authorisation so that it is no longer, to any extent, of no effect under this Division.

Civil penalty: 5,000 penalty units.

Offence

70(2)  


A person commits an offence if:


(a) the person is required to vary or revoke an authorisation under subsection (1); and


(b) the person engages in conduct; and


(c) the conduct contravenes subsection (1).

Criminal penalty: 2 years imprisonment.

SECTION 71   OBLIGATION TO NOTIFY THE REGISTRAR ETC. ABOUT CREDIT REPRESENTATIVES   Requirement to notify the Registrar when credit representative authorised

71(1)  


If a person authorises a credit representative under subsection 64(1) or 65(1), the person must, within 15 business days of the authorisation, lodge with the Registrar a notice in accordance with subsection (1A).

Civil penalty: 5,000 penalty units.

71(1A)  
A notice under subsection (1) must meet any requirements of the data standards.

Requirement to notify licensee of sub-authorisation

71(2)  
If:

(a)  a person authorises a natural person as a credit representative of a licensee under subsection 65(1) (which deals with sub-authorisations); and

(b)  

the consent of the licensee to the authorisation was given in relation to a specified class of natural persons;

then the person must, within 15 business days of the authorisation, give the licensee written notice of the authorisation in accordance with subsection (3) and in the approved form.

Civil penalty: 5,000 penalty units.

Details to be included in notice under subsection (2)

71(3)  
The notice must include the following details:

(a)  the name and business address of the credit representative;

(b)  details of the authorisation, including the date on which it was made and what the credit representative is authorised to do on behalf of the licensee;

(c)  details of the external dispute resolution scheme of which the credit representative is a member;

(d)  details of each other licensee on behalf of whom the credit representative is a credit representative. Requirement to notify the Registrar of change in details etc.

71(4)  
If:

(a)  a person authorises a credit representative under subsection 64(1) or 65(1); and

(b)  

either:

(i) a detail (if any) required by the data standards to be included in a notice under subsection (1) changes; or

(ii) the person revokes the authorisation;

then the person must, within 10 business days of the change or revocation, lodge with the Registrar a notice of the change or revocation.

Civil penalty: 5,000 penalty units.

71(5)  
A notice under subsection (4) must meet any requirements of the data standards.

Strict liability offence

71(6)  


A person commits an offence if:

(a)  the person is subject to a requirement to give a notice under subsection (1), (2) or (4); and

(b)  the person engages in conduct; and

(c)  the conduct contravenes the requirement.

Criminal penalty: 60 penalty units.

71(7)  
Subsection (6) is an offence of strict liability.

Note:

For strict liability, see section 6.1 of the Criminal Code.

SECTION 72   CREDIT REPRESENTATIVE NUMBERS  

72(1)  
Within a reasonable period after receiving a notice under subsection 71(1) of the authorisation of a credit representative, the Registrar must allocate the credit representative a unique credit representative number.

72(2)  
The Registrar must give notice of the credit representative number to:

(a)  the credit representative; and

(b)  the person who authorised the credit representative.

72(3)  
This section does not apply in relation to a credit representative that has already been allocated a credit representative number.

Division 3 - Information about representatives  

SECTION 73   ASIC MAY GIVE LICENSEE INFORMATION ABOUT REPRESENTATIVES   ASIC may give licensee information about representatives

73(1)  
If ASIC considers it appropriate to do so, it may give information to a licensee about a person whom ASIC believes is, or will be, a representative of the licensee. However, ASIC may only do so if it believes, on reasonable grounds, that the information is true. Requirements about use of information

73(2)  
A licensee to whom information is given under subsection (1) may make use of, make a record of, or give to another person, the information for a purpose connected with:

(a)  the licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving the information; or

(b)  the licensee taking action pursuant to such a decision.

73(3)  


A licensee to whom information is given under subsection (1) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (2).

Civil penalty: 5,000 penalty units.

73(4)  
A person to whom information has been given for a purpose or purposes under subsection (2) or this subsection may make use of, make a record of, or give to another person, that information for that purpose or any of those purposes.

73(5)  


A person to whom information has been given for a purpose or purposes under subsection (2) or (4) must not make use of, make a record of, or give to another person, the information other than as permitted by subsection (4).

Civil penalty: 5,000 penalty units.

Offence

73(6)  


A person commits an offence if:

(a)  the person is subject to a requirement under subsection (3) or (5); and

(b)  the person engages in conduct; and

(c)  the conduct contravenes the requirement.

Criminal penalty: 1 year imprisonment.

Qualified privilege

73(7)  
A person has qualified privilege in relation to an act done by the person under subsection (2) or (4). Use of information obtained under this section in court

73(8)  
A person to whom information is given in accordance with this section must not give any of the information to a court, or produce in a court a document that sets out some or all of the information, except:

(a)  for a purpose connected with:


(i) a licensee making a decision about what action (if any) to take in relation to the representative, as a consequence of receiving some or all of the information; or

(ii) a licensee taking action pursuant to that decision; or

(iii) proving in proceedings in that court that particular action taken by a licensee in relation to the representative was taken pursuant to that decision; or

(b)  in proceedings in that court, in so far as the proceedings relate to an alleged contravention of this section; or


(c) in proceedings about giving to a court false information some, at least, of which was the information given under this section.

73(9)  
For the purposes of subsection (8), a licensee takes action in relation to a representative if the licensee:

(a)  takes action by way of making, terminating or varying the terms and conditions of an agreement; or

(b)  otherwise takes action in relation to an agreement;

to the extent that the agreement relates to the representative acting on behalf of the licensee.

73(10)  
Subsection (8) also has the effect it would have if:

(a)  

a reference in it to a court were a reference to a court of a country outside Australia; and

(b)  paragraph (8)(b) were omitted.

Division 4 - Liability of licensees for representatives  

SECTION 74   74   APPLICATION OF THIS DIVISION  
This Division applies to any conduct of a representative of a licensee:


(a) that relates to a credit activity; and


(b) on which a third person (the client ) could reasonably be expected to rely; and


(c) on which the client in fact relied in good faith.

SECTION 75   75   RESPONSIBILITY IF REPRESENTATIVE OF ONLY ONE LICENSEE  
If the representative is the representative of only one licensee, the licensee is responsible, as between the licensee and the client, for the conduct of the representative, whether or not the representative's conduct is within the authority of the licensee.

SECTION 76   REPRESENTATIVES OF MULTIPLE LICENSEES   When this section applies

76(1)  
This section applies if the representative is the representative of more than one licensee. Conduct covered by only one authority

76(2)  
If:


(a) the representative is the representative of one of the licensees only in relation to a particular class of credit activity; and


(b) the conduct relates to that class of credit activity;

that licensee is responsible for the conduct, as between that licensee and the client, whether or not the conduct is within the authority of the licensee.

Conduct covered by multiple authorities

76(3)  
If:


(a) the representative is the representative of more than one of the licensees in relation to a particular class of credit activity; and


(b) the conduct relates to that class of credit activity; and


(c) the conduct is within the authority of:


(i) only one of those licensees (the authorising licensee ); or

(ii) 2 or more of those licensees (the authorising licensees );

then:


(d) if subparagraph (c)(i) applies - the authorising licensee is responsible for the conduct, as between that licensee and the client; or


(e) if subparagraph (c)(ii) applies - the authorising licensees are jointly and severally responsible for the conduct, as between themselves and the client. All other cases

76(4)  
In any other case, all of the licensees are jointly and severally responsible for the conduct, as between themselves and the client, whether or not the representative's conduct is within the authority of any of them.

SECTION 77   77   RESPONSIBILITY EXTENDS TO LOSS OR DAMAGE SUFFERED BY CLIENT  
The responsibility of a licensee under this Division extends so as to make the licensee liable to the client in relation to any loss or damage suffered by the client as a result of the representative's conduct.

SECTION 78   EFFECT OF THIS DIVISION  

78(1)   [Remedies against licensee and representative]  

If a licensee is responsible for the conduct of its representative under this Division, the client has the same remedies against the licensee that the client has against the representative.

78(2)   [Joint and several liability]  

The licensee and the representative (along with any other licensees that are also responsible) are all jointly and severally liable to the client in relation to those remedies.

78(3)   [Criminal responsibility or civil liability]  

However, nothing in this Division imposes:


(a) any criminal responsibility; or


(b) any civil liability under a provision of this Act apart from this Division;

on a licensee that would not otherwise be imposed on the licensee.

78(4)   [No relief from liability given to representatives]  

This Division does not relieve a representative of a licensee of any liability that the representative has to the client or the licensee.

78(5)   [Cannot contract out of sections 75, 76 or 77]  

An agreement has no effect in so far as it purports to alter or restrict the operation of section 75, 76 or 77.

78(6)   [Exceptions to subsection 5]  

However, subsection (5) does not apply to the extent that the agreement:


(a) provides for a representative of a licensee to indemnify the licensee for a liability of the licensee in relation to the representative; or


(b) provides for a licensee, for whom a representative acts, to indemnify another licensee for a liability in relation to the representative.

78(7)   [Licensee must not make agreement]  

A licensee must not make, or offer to make, an agreement that has, or would have, no effect under subsection (5).

PART 2-4 - BANNING OR DISQUALIFICATION OF PERSONS FROM ENGAGING IN CREDIT ACTIVITIES  

Division 1 - Introduction  

SECTION 79   GUIDE TO THIS PART  


This Part is about banning or disqualifying persons from:

  • (a) engaging in credit activities; or
  • (b) controlling others who engage in credit activities; or
  • (c) performing some or any functions involved in others engaging in credit activities.
  • The bans are orders made by ASIC under Division 2.

    The disqualifications are orders made by the court under Division 3.

    Division 2 - Banning orders  

    SECTION 80   ASIC'S POWER TO MAKE A BANNING ORDER   Making a banning order

    80(1)  


    ASIC may, in writing, make one or more orders ( banning orders ) against a person:

    (a)  if ASIC suspends or cancels a licence of the person; or

    (b)  

    if the person becomes insolvent; or

    (c)  for a natural person - if the person is convicted of fraud; or

    (d)  if the person has:


    (i) contravened any credit legislation; or

    (ii) been involved in a contravention of a provision of any credit legislation by another person; or

    (e)  if ASIC has reason to believe that the person is likely to:


    (i) contravene any credit legislation; or

    (ii) be involved in a contravention of a provision of any credit legislation by another person; or

    (f)  

    if ASIC has reason to believe that the person is not a fit and proper person to:

    (i) engage in one or more credit activities; or

    (ii) perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

    (iii) control another person who engages in credit activities; or

    (fa)  

    if ASIC has reason to believe that the person is not adequately trained, or is not competent, to:

    (i) engage in one or more credit activities; or

    (ii) perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of another person who engages in credit activities; or

    (iii) control another person who engages in credit activities; or

    (fb)  

    if the person has, at least twice, been linked to a refusal or failure to give effect to a determination made by AFCA (as defined in section 910C of the Corporations Act 2001) relating to a complaint that relates to:

    (i) credit activities; or

    (ii) a financial services business (within the meaning of the Corporations Act 2001); or

    (fc)  

    if subsection (3) applies to the person in relation to 2 or more corporations; or

    (g)  if a prescribed State or Territory order is in force against the person; or

    (h)  in any other circumstances prescribed by the regulations.

    80(1A)  


    Subsection (1) has effect subject to subsection (4). When a person is not a fit and proper person

    80(2)  


    For the purposes of paragraph (1)(f), ASIC must have regard to the matters in section 37B. When a person has been an officer of a corporation unable to pay its debts

    80(3)  


    This subsection applies to a person in relation to a corporation if, within the last 7 years:

    (a)  the person was an officer (within the meaning of the Corporations Act 2001) of the corporation when the corporation was:


    (i) engaging in credit activities; or

    (ii) carrying on a financial services business (within the meaning of the Corporations Act 2001); and

    (b)  the corporation was wound up either:


    (i) while the person was such an officer of the corporation; or

    (ii) within the 12 months after the person ceased to be such an officer of the corporation; and

    (c)  a liquidator lodged a report under subsection 533(1) of the Corporations Act 2001 (including that subsection as applied by section 526-35 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006) about the corporation's inability to pay its debts.

    Person to be given an opportunity to be heard

    80(4)  


    Subject to subsection (5), if ASIC has not delegated its power to make a banning order against a person to a Financial Services and Credit Panel, ASIC may make the order only after giving the person an opportunity:

    (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

    (b)  to make submissions to ASIC on the matter.

    Note:

    If ASIC delegates its power to make a banning order against a person to a Financial Services and Credit Panel, the panel may make the order only after holding a hearing in relation to the proposed order (see section 157 of the ASIC Act).

    80(5)  


    ASIC may make a banning order against a person without giving the person the opportunities mentioned in subsection (4) if:

    (a)  

    either:

    (i) ASIC has not delegated its power to make the banning order to a Financial Services and Credit Panel; or

    (ii) ASIC exercises its power to make the banning order despite such a delegation; and

    (b)  subsection (6) or (6A) applies.

    Note:

    See section 34AB of the Acts Interpretation Act 1901 (effect of delegation).

    View history note View history note

    80(6)  


    This subsection applies if:

    (a)  

    ASIC's grounds for making a banning order against a person include that ASIC has suspended or cancelled a licence of the person (see paragraph (1)(a)); and

    (b)  the suspension or cancellation took place without a hearing under section 54.

    80(6A)  


    This subsection applies if:

    (a)  ASIC's grounds for making a banning order against a person include that the person has been convicted of fraud (see paragraph (1)(c)); and

    (b)  the person has been convicted of serious fraud.

    Copy of banning order to be given to the person

    80(7)  


    ASIC must give a copy of a banning order to the person against whom it was made.

    SECTION 81   WHAT A BANNING ORDER PROHIBITS  

    81(1)  


    A banning order made against a person may specify that the person is prohibited from doing one or more of the following:


    (a) engaging in any credit activities;


    (b) engaging in specified credit activities in specified circumstances or capacities;


    (c) controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;


    (d) performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);


    (e) performing specified functions involved in the engaging in of credit activities.

    81(2)  


    The banning order may specify that a particular prohibition specified in the order applies against the person:


    (a) if the sole ground for the banning order is because paragraph 80(1)(fc) applies - for a specified period of up to 5 years; or


    (b) otherwise - either permanently or for a specified period.

    Note:

    This subsection applies separately to each prohibition specified in the order.

    81(3)  
    A banning order may include a provision allowing the person against whom it was made, subject to any specified conditions:


    (a) to do specified acts; or


    (b) to do specified acts in specified circumstances;

    that the order would otherwise prohibit them from doing.

    81(4)  
    A banning order is not a legislative instrument.

    SECTION 82   EFFECT OF BANNING ORDERS   Requirement not to engage in conduct contrary to banning order

    82(1)  


    A person must not engage in conduct that is contrary to a banning order that is in force against the person.

    Civil penalty: 5,000 penalty units.

    Offence

    82(2)  


    A person commits an offence if:


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


    (b) the person engages in conduct; and


    (c) the conduct contravenes the requirement.

    Criminal penalty: 5 years imprisonment.

    Note:

    A person against whom a banning order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the banning order applies (see subsection 40(1)).

    SECTION 83   VARIATION OR CANCELLATION OF BANNING ORDERS  

    83(1)   [ASIC may vary or cancel]  

    ASIC may vary or cancel a banning order if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order.

    83(2)   [ASIC may act on own initiative or on application]  

    ASIC may do so:


    (a) on its own initiative; or


    (b) if the person against whom the order was made lodges with ASIC an application for the variation or cancellation.

    83(3)   [Approved form]  

    The application must be in the approved form.

    83(4)   [When ASIC proposes not to vary or cancel under para (2)(b)]  

    If ASIC proposes not to vary or cancel a banning order in accordance with an application given by a person under paragraph (2)(b), ASIC must give the person an opportunity:


    (a) to appear, or be represented, at a hearing before ASIC that takes place in private; and


    (b) to make submissions to ASIC on the matter.

    83(5)   [Written notice must be given]  

    ASIC must give written notice of the variation or cancellation of a banning order to the person against whom the order was made.

    SECTION 84   DATE OF EFFECT, NOTICE AND PUBLICATION OF BANNING ORDER, VARIATION OR CANCELLATION  

    84(1)   [When "in force"]  

    A banning order comes into force when it is given to the person against whom it is made.

    84(2)   [Variation or cancellation in force when written notice given to person]  

    A variation or cancellation of a banning order comes into force when written notice of the variation or cancellation is given to the person against whom the order was made.

    84(3)   [Publication]  

    ASIC must publish a notice on ASIC's website as soon as practicable after making, varying or cancelling a banning order. The notice must state when the banning order, or variation or cancellation of the banning order, came into force and:


    (a) in the case of the making of a banning order - set out a copy of the banning order; or


    (b) in the case of the variation of a banning order - set out a copy of the banning order as varied.

    84(4)   [Summary publication]  

    However, if the banning order contains a provision of the kind referred to in subsection 81(3) and ASIC considers that the notice on its website would be unreasonably long if that provision were included, the notice may instead set out a summary of the provision's effect.

    SECTION 85   STATEMENT OF REASONS  

    85(1)   [Must include statement of reasons]  

    A copy of a banning order given to a person must be accompanied by a statement of reasons for the order.

    85(2)   [Statement of reasons for variation]  

    If ASIC varies a banning order made against a person, ASIC must, on request by the person, give the person a statement of reasons for the variation.

    Division 3 - Disqualification by the court  

    SECTION 86   DISQUALIFICATION BY THE COURT  

    86(1)  


    ASIC may apply to the court for one or more orders under subsection (2) in relation to a person if ASIC:


    (a) cancels a licence of the person; or


    (b) makes a banning order against the person that is to operate permanently.

    86(2)  
    The court may make:


    (a) one or more orders disqualifying the person, permanently or for a specified period, from doing one or more of the following:


    (i) engaging in any credit activities;

    (ii) engaging in specified credit activities in specified circumstances or capacities;

    (iii) controlling, whether alone or in concert with one or more other entities (as defined by section 64A of the Corporations Act 2001), another person who engages in credit activities;

    (iv) performing any function involved in the engaging in of credit activities (including as an officer (within the meaning of the Corporations Act 2001), manager, employee, contractor or in some other capacity);

    (v) performing specified functions involved in the engaging in of credit activities; or


    (b) any other order the court considers appropriate.

    Note:

    A person against whom a disqualification order is in force cannot be granted a licence authorising the person to engage in a credit activity to which the disqualification order applies (see subsection 40(1))

    PART 2-5 - FINANCIAL RECORDS, TRUST ACCOUNTS AND AUDIT REPORTS  

    Division 1 - Introduction  

    SECTION 87   87   GUIDE TO THIS PART  

    This Part is about financial records, trust accounts and matters relating to audit reports required under this Act.

    Division 2 deals with the requirement for licensees to keep certain financial records, and provides for how those records must be kept.

    Division 3 deals with trust accounts. Licensees that provide credit services and that receive money on behalf of others in the course of those services are required to maintain a trust account. Those licensees must also comply with requirements in relation to trust account money, trust account statements and trust account audit reports.

    Division 4 has requirements relating to audit reports required by this Act, and the auditors that prepare those reports.

    Division 2 - Financial records of licensees  

    SECTION 88   OBLIGATION TO KEEP FINANCIAL RECORDS   Requirement to keep financial records

    88(1)  


    A licensee must:


    (a) keep financial records that correctly record and explain the transactions and financial position of any business of engaging in credit activities carried on by the licensee; and


    (b) keep those records in accordance with this Division; and


    (c) comply with subsection 90(2) in relation to the conversion of records into the English language; and


    (d) comply with section 91 in relation to the location and production of records and particulars.

    Civil penalty: 5,000 penalty units.

    Meaning of financial records

    88(2)  
    Financial records includes:


    (a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and


    (b) documents of prime entry; and


    (c) any trust account statement or trust account report required under section 100. Offence

    88(3)  


    A person commits an offence if:


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


    (b) the person engages in conduct; and


    (c) the conduct contravenes subsection (1).

    Criminal penalty: 5 years imprisonment.

    Financial records may be kept with other records

    88(4)  
    A licensee does not contravene this Division merely because some or all of the financial records are prepared as a part of, or in conjunction with, the records relating to any other business that is carried on by the licensee.

    Note:

    For the purposes of subsection (3), a defendant bears an evidential burden in relation to the matter in subsection (4) (see subsection 13.3(3) of the Criminal Code).

    SECTION 89   89   HOW FINANCIAL RECORDS ARE TO BE KEPT  
    The financial records must be kept in a way that:


    (a) enables true and fair profit and loss statements, and balance sheets, of the business referred to in paragraph 88(1)(a) to be prepared from time to time; and


    (b) allows those statements and balance sheets to be conveniently and properly audited in accordance with the auditing standards (if any) prescribed by regulations made under section 106.

    SECTION 90   LANGUAGE OF FINANCIAL RECORDS  

    90(1)   [How records are to be kept]  

    The financial records must be kept in writing in the English language, or in a manner that enables them to be readily accessible and readily converted into writing in the English language.

    90(2)   [If records are not kept in writing in the English language]  

    If any of the financial records are not kept in writing in the English language, the licensee must, if required to convert the financial records concerned into writing in the English language by a person who is entitled to examine the financial records concerned, comply with the requirement within a reasonable time.

    SECTION 91   91   LOCATION OF FINANCIAL RECORDS  
    If any of the financial records are kept outside this jurisdiction, the licensee must:


    (a) cause to be sent to and retained at a place in this jurisdiction such particulars in relation to the business dealt with in those financial records as will enable true and fair profit and loss statements and balance sheets to be prepared; and


    (b) if required by ASIC to produce those financial records at a place in this jurisdiction, comply with the requirement not later than 28 days after the requirement is made.

    SECTION 92   92   INFORMATION TO BE SHOWN IN FINANCIAL RECORDS  
    The financial records must be kept in sufficient detail to show particulars of:


    (a) all money received or paid by the licensee; and


    (b) for each credit contract under which the licensee is the credit provider:


    (i) the amount and day of all payments made by or on behalf of the debtor under the credit contract; and

    (ii) all amounts (including principal, interest, fees and charges) owed by the debtor under the credit contract; and


    (c) for each consumer lease under which the licensee is the lessor - the amount and day of all payments made by or on behalf of the lessee under the consumer lease; and


    (d) for each guarantee under which the licensee is the beneficiary of the guarantee - the amount and day of all payments made by or on behalf of the guarantor under the guarantee; and


    (e) all income received by the licensee from indirect remuneration, interest, and other sources, and all expenses, indirect remuneration, and interest paid by the licensee; and


    (f) all the assets and liabilities (including contingent liabilities) of the licensee; and


    (g) any other matters prescribed by the regulations.

    SECTION 93   93   REGULATIONS MAY IMPOSE ADDITIONAL REQUIREMENTS  
    The regulations may impose additional requirements to be complied with in relation to the financial records including, for example:


    (a) requirements for things to be contained in the records; and


    (b) requirements relating to the level of detail to be shown in the records.

    SECTION 94   94   FINANCIAL RECORDS TAKEN TO BE MADE WITH LICENSEE'S AUTHORITY  
    An entry in the records is, unless the contrary is proved, to be taken to have been made by, or with the authority of, the licensee.

    SECTION 95   OBLIGATION TO RETAIN FINANCIAL RECORDS FOR 7 YEARS   Requirement to retain financial records

    95(1)  


    A licensee that is required by this Division to make a financial record must retain it for 7 years after the transactions covered by the record are completed.

    Civil penalty: 5,000 penalty units.

    Regulations

    95(2)  
    The regulations may prescribe financial records to which subsection (1) does not apply. Records to be kept even if person stops carrying on business

    95(3)  
    Financial records must be retained in accordance with this section, even if the person stops carrying on any business to which they relate. Offence

    95(4)  


    A person commits an offence if:


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


    (b) the person engages in conduct; and


    (c) the conduct contravenes the requirement.

    Criminal penalty: 6 months imprisonment.

    SECTION 96   FINANCIAL RECORDS ARE PRIMA FACIE EVIDENCE OF MATTERS  

    96(1)   [Financial records prima facie evidence]  

    In proceedings in a court, a financial record kept under this Division is admissible as prima facie evidence of any matter in the financial record.

    96(2)   [Presumed financial record unless contrary is proved]  

    A document purporting to be a financial record kept by a licensee under this Division is, unless the contrary is proved, presumed to be a financial record kept by the licensee under this Division.

    96(3)   [Electronic records]  

    If:


    (a)because of subsection (1) a financial record is prima facie evidence of a matter; and


    (b) the financial record, or a part of the financial, is kept or prepared by recording or storing matters (including that matter) by means of a mechanical, electronic or other device;

    a written reproduction of that matter as so recorded or stored is admissible as prima facie evidence of that matter in a proceeding in a court.

    96(4)   [Written reproduction of electronic records]  

    A written document that purports to reproduce a matter recorded or stored by means of a mechanical, electronic or other device is, unless the contrary is proved, presumed to be a reproduction of that matter.

    Division 3 - Trust accounts of credit service licensees  

    SECTION 97   97   APPLICATION OF THIS DIVISION  
    This Division applies to a licensee (the credit service licensee ) that:


    (a) holds a licence that authorises the licensee to provide a credit service; and


    (b) in the course of providing the credit service, receives money on behalf of another person.

    SECTION 98   OBLIGATION FOR CREDIT SERVICE LICENSEES TO MAINTAIN TRUST ACCOUNT   Requirement to maintain trust account

    98(1)  


    The credit service licensee must maintain one more trust accounts (the trust account ) in accordance with this section.

    Civil penalty: 5,000 penalty units.

    Requirements for trust accounts

    98(2)  
    The trust account must be maintained with an Australian ADI (within the meaning of section 9 of the Corporations Act 2001).

    98(3)  
    The trust account must be designated as the credit service licensee's trust account. Offence

    98(4)  


    The credit service licensee commits an offence if:


    (a) the credit service licensee is subject to a requirement under subsection (1); and


    (b) the credit service licensee engages in conduct; and


    (c) the conduct contravenes the requirement.

    Criminal penalty: 6 months imprisonment.

    SECTION 99   OBLIGATIONS IN RELATION TO TRUST ACCOUNT MONEY   Requirement to pay money to credit of trust account

    99(1)  


    The credit service licensee must pay to the credit of the trust account any money received by the credit service licensee on behalf of another person in relation to the credit service provided by the licensee.

    Civil penalty: 5,000 penalty units.

    Requirement in relation to withdrawal of money from trust account

    99(2)  


    The credit service licensee must not withdraw any money paid into the trust account, other than for the purpose of paying the money in accordance with subsection (3).

    Civil penalty: 5,000 penalty units.

    Requirement in relation to payment of money from trust account

    99(3)  


    The credit service licensee must pay any money withdrawn from the trust account to the person or persons lawfully entitled to receive that money.

    Civil penalty: 5,000 penalty units.

    Offence

    99(4)  


    The credit service licensee commits an offence if:


    (a) the credit service licensee is subject to a requirement under subsection (1), (2) or (3); and


    (b) the credit service licensee engages in conduct; and


    (c) the conduct contravenes the requirement.

    Criminal penalty: 6 months imprisonment.

    Trust account money not available for payment of debts etc.

    99(5)  
    Money paid into a trust account by the credit service licensee under this section:


    (a) is not available for the payment of a debt of any other creditor of the credit service licensee; and


    (b) is not liable to be attached or taken in execution under the order or process of a court at the instance of any such creditors.

    SECTION 100   OBLIGATION TO LODGE TRUST ACCOUNT STATEMENT AND TRUST ACCOUNT AUDIT REPORT   Requirement to prepare and lodge trust account statement

    100(1)  
    The credit service licensee must, for each financial year of the credit service licensee:


    (a) prepare a written statement in relation to the trust account (the trust account statement ) in accordance with this section; and


    (b) lodge the trust account statement with ASIC in accordance with this section.

    Civil penalty: 5,000 penalty units.

    Requirement to prepare and lodge trust account audit report

    100(2)  


    The credit service licensee must, with the trust account statement, lodge with ASIC an auditor's report (the trust account audit report ) in accordance with this section.

    Civil penalty: 5,000 penalty units.

    Requirements for statement and audit report

    100(3)  
    Each of the trust account statement and trust account audit report must:


    (a) be in the approved form; and


    (b) contain the information and matters prescribed by the regulations; and


    (c) be lodged with ASIC in accordance with section 101.

    100(4)  
    The trust account audit report must be prepared by a person who complies with any eligibility requirements prescribed by the regulations. Offence

    100(5)  


    The credit service licensee commits an offence if:


    (a) the credit service licensee is subject to a requirement under subsection (1) or (2); and


    (b) the credit service licensee engages in conduct; and


    (c) the conduct contravenes the requirement.

    Criminal penalty: 5 yearsimprisonment.

    Meaning of financial year

    100(6)  
    A financial year of the credit service licensee means:


    (a) if the credit service licensee is a body corporate to which section 323D of the Corporations Act 2001 applies - a financial year of the body corporate (within the meaning of that section); and


    (b) in any other case - a year ending on 30 June.

    SECTION 101   TIME OF LODGMENT OF TRUST ACCOUNT STATEMENT AND TRUST ACCOUNT AUDIT REPORT  

    101(1)   [Time for lodgment]  

    Unless an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the day that is 3 months after the end of the financial year of the credit service licensee to which they relate.

    101(2)   [Time for lodgment where extension granted]  

    If an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the end of the extended period.

    101(3)   [Application for approval of an extension]  

    ASIC may, on application made:


    (a) by the credit service licensee and the auditor that is to prepare the trust account audit report; and


    (b) before the end of the period that would otherwise apply;

    approve an extension of the period for lodging the trust account statement and trust account audit report. The extension may be of the period originally applicable or the period applicable under a previous extension.

    101(4)   [Approval subject to conditions]  

    An approval may be given subject to any conditions imposed by ASIC.

    101(5)   [Must comply with conditions]  

    If an approval is given subject to conditions, the licensee must comply with those conditions.

    Division 4 - Matters relating to audit reports  

    SECTION 102   AUDITOR'S RIGHT OF ACCESS TO RECORDS, INFORMATION ETC.   Auditor is entitled to access and assistance etc. from licensee

    102(1)  
    An auditor (the auditor ) who prepares one of the following audit reports (the audit report ):


    (a) an audit report required under subsection 49(3) in relation to a licensee;


    (b) a trust account audit report required under subsection 100(2) in relation to a licensee;

    has a right of access at all reasonable times to the financial records or other credit books of the licensee for purposes relating to the audit report.

    102(2)  
    The auditor is entitled to require:


    (a) from the licensee; or


    (b) if the licensee is a body corporate - from any director, secretary or senior manager of the licensee;

    any assistance and explanations that the auditor desires for purposes relating to the audit report.

    Requirement to give auditor access and assistance etc

    102(3)  
    The licensee, or a director, secretary or senior manager of the licensee if it is a body corporate, must not:


    (a) refuse or fail to allow the auditor access, in accordance with subsection (1), to financial records or other credit books of the licensee; or


    (b) refuse or fail to give assistance, or an explanation, to the auditor as and when required under subsection (2); or


    (c) otherwise hinder, obstruct or delay the auditor in the performance or exercise of the auditor's duties or powers.

    Civil penalty: 5,000 penalty units.

    Offence

    102(4)  


    A person commits an offence if:


    (a) the person is subject to a requirement under subsection (3); and


    (b) the person engages in conduct; and


    (c) the person's conduct contravenes the requirement.

    Criminal penalty: 2 years imprisonment.

    SECTION 103   AUDITOR'S FEES AND EXPENSES  

    103(1)   [Fees payable by licensee]  

    The reasonable fees and expenses of the auditor for preparing the audit report are payable by the licensee.

    103(2)   [Fees recoverable by action]  

    The auditor may recover those fees by action against the licensee.

    SECTION 104   AUDITOR TO REPORT ON CERTAIN MATTERS   Requirement for auditor to disclose matters

    104(1)  
    If the auditor, in the performance of duties relating to the audit report, becomes aware of a matter referred to in subsection (2), the auditor must, within 7 days after becoming aware of the matter:


    (a) lodge a written report on the matter with ASIC; and


    (b) give a copy of the report to the licensee.

    Civil penalty: 5,000 penalty units.

    Matters that must be disclosed

    104(2)  
    A report must be given in relation to any matter that, in the opinion of the auditor:


    (a) has adversely affected, is adversely affecting or may adversely affect the ability of the licensee to meet the licensee's obligations as a licensee; or


    (b) constitutes or may constitute a contravention of:


    (i) Division 2 or 3 (or regulations made under those Divisions); or

    (ii) a condition of the licensee's licence; or


    (c) constitutes an attempt to unduly influence, coerce, manipulate or mislead the auditor in the preparation of the audit report. Offence

    104(3)  


    The auditor commits an offence if:


    (a) the auditor is subject to a requirement under subsection (1); and


    (b) the auditor engages in conduct; and


    (c) the auditor's conduct contravenes the requirement.

    Criminal penalty: 1 year imprisonment.

    SECTION 105   QUALIFIED PRIVILEGE FOR AUDITOR ETC.   Qualified privilege for auditor

    105(1)  
    The auditor has qualified privilege in relation to:


    (a) a statement that the auditor makes, orally or in writing, in the course of its duties relating to the audit report; or


    (b) the lodging of a report with ASIC under subsection 104(1); or


    (c) the giving of a report to the licensee under subsection 104(1).

    Note:

    If the auditor is a company, the company has qualified privilege under this subsection in relation to statements made, and reports lodged or sent, by natural persons on behalf of the company if those statements and notices can be properly attributed to the company.

    Qualified privilege for registered company auditor acting on behalf of company

    105(2)  
    If the auditor is a company registered under the Corporations Act 2001, a registered company auditor acting on behalf of the company has qualified privilege in relation to:


    (a) a statement that the registered company auditor makes (orally or in writing) in the course of the performance, on behalf of the company, of the company's duties relating to the audit report; or


    (b) the lodging by the registered company auditor, on behalf of the company, of a report with ASIC under subsection 104(1); or


    (c) the giving by the registered company auditor, on behalf of the company, of a report to the licensee under subsection 104(1). Qualified privilege for subsequent publication

    105(3)   [Documents published by auditor]  

    A person has qualified privilege in relation to the publishing of a document prepared by the auditor in the course of the auditor's duties relating to the audit report.

    105(4)   [Published statements]  

    A person has qualified privilege in relation to the publishing of a statement:


    (a) made by the auditor as referred to in subsection (1); or


    (b) made by a registered company auditor as referred to in subsection (2).

    SECTION 106   106   REGULATIONS IN RELATION TO AUDIT REPORTS ETC.  
    The regulations may make provision in relation to:


    (a) the audit reports referred to in subsection 102(1); and


    (b) audit reports that persons who have applied for a licence may be requested to lodge under subsection 37(4) or 46A(3); and


    (c) the auditors that prepare those reports; and


    (d) auditing standards that must be complied with in relation to those reports.

    PART 2-6 - EXEMPTIONS AND MODIFICATIONS RELATING TO THIS CHAPTER  

    Division 1 - Introduction  

    SECTION 107   107   GUIDE TO THIS PART  

    This Part is about exemptions from, and modifications of, the provisions of this Chapter.

    Division 2 deals with how exemptions and modifications may be made by ASIC or by the regulations.

    Division 2 - Exemptions and modifications relating to this Chapter  

    SECTION 108   108   PROVISIONS TO WHICH THIS PART APPLIES  
    The provisions to which this Part applies are:


    (a) this Chapter; and


    (b) definitions in this Act, as they apply to references in this Chapter; and


    (c) instruments made for the purposes of this Chapter.

    SECTION 109   EXEMPTIONS AND MODIFICATIONS BY ASIC   Exemptions and modifications

    109(1)  
    ASIC may:


    (a) exempt:


    (i) a person; or

    (ii) a person and all of the person's credit representatives;

    from all or specified provisions to which this Part applies; or


    (b) exempt a credit activity that is engaged in in relation to a specified credit contract, mortgage, guarantee or consumer lease from all or specified provisions to which this Part applies; or


    (c) declare that provisions to which this Part applies apply in relation to a person, or a credit activity referred to in paragraph (1)(b), as if specified provisions were omitted, modified or varied as specified in the declaration.

    109(2)  
    An exemption or declaration under subsection (1) is not a legislative instrument.

    109(3)  
    ASIC may, by legislative instrument:


    (a) exempt a class of persons from all or specified provisions to which this Part applies; or


    (b) exempt a credit activity (other than a credit activity referred to in paragraph (1)(b)) from all or specified provisions to which this Part applies; or


    (c) exempt a class of credit activities from all or specified provisions to which this Part applies; or


    (d) declare that provisions to which this Part applies apply in relation to a credit activity (other than a credit activity referred to in paragraph (1)(b)), or a class of persons or credit activities, as if specified provisions were omitted, modified or varied as specified in the declaration. Conditions on exemptions

    109(4)  
    An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The court may order the person to comply with the condition in a specified way. Only ASIC may apply to the court for the order. Publication of exemptions and declarations

    109(5)  
    An exemption or declaration under subsection (1) must be in writing and ASIC must publish notice of it on its website. Special rules in relation to offences

    109(6)