This information sheet (INFO 126) is for credit licensees and credit representatives. Credit representatives are authorised to engage in specified credit activities on behalf of a credit licensee. They can be authorised to engage in some or all of the activities authorised by the licence.
For example, a licensee authorised to engage in activities other than as a credit provider can authorise a representative to engage in these activities but not to provide credit.
- Can you be a credit representative of two or more credit licensees?
- Can a credit licensee also be a credit representative?
- How to authorise credit representatives
- Monitoring and supervising representatives
- How to notify ASIC of credit representative details
- How to make bulk appointments
- Body corporate credit representatives and sub-authorisations
- Employees and directors of a licensee do not need to be authorised as representatives
- Licensees that are partnerships
A person may be a credit representative of two or more credit licensees if:
- each licensee consents to that person being a credit representative of the other, or
- each of the licensees is a related body corporate of the other.
When a licensee notifies us of the authorisation of a person who is already a credit representative of another credit licensee, the notification must include the details of the other credit licensee and confirm their consent for the authorisation.
A person can be a credit licensee and a representative but only where they are for different authorised credit activities. For example, you can be a licensee authorised to engage in credit activities as a credit provider or lessor and be authorised to provide credit assistance as a credit representative.
How to authorise credit representatives
If a licensee is intending to authorise a credit representative they should:
- undertake background checks on that representative
- ensure that the representative is adequately trained to engage in credit activities
- ensure that the representative has current Australian Financial Complaints Authority (AFCA) membership before the authorisation is given
- provide written consent to the appointment
- ensure they have adequate systems and procedures in place to monitor and supervise their representatives (see Monitoring and supervising representatives).
Licensees should make relevant inquiries into the background of the people that they authorise as credit representatives, both before appointing them and while they continue to act as representatives.
These checks could include referee reports, searches of our register of banned and disqualified persons, and police checks.
The authorisation of a credit representative is of no effect if the following applies to the representative when the authorisation is given:
- the authorisation to engage in credit activities is not covered by the licensee's licence
- the person is banned from engaging in credit under relevant state, territory or federal law
- the person has a prescribed state or territory order in force against them
- the person has been convicted of serious fraud within the last 10 years.
An authorisation will also cease to have effect if the authorised person becomes subject to the above matters after the authorisation is given.
It is an offence to purport to give an authorisation that is of no effect, or to fail to vary or revoke an authorisation that has later ceased to have effect.
Credit representatives must be adequately trained and competent to engage in the credit activities authorised by the credit licensee.
Credit licensees must determine the appropriate training for their credit representatives on appointment and while they continue to act as representatives, to comply with their obligation to ensure that their representatives are adequately trained and competent to engage in the credit activities. If industry standards exist for sectors of the credit industry or for specific products, we expect that licensees will ensure their representatives are trained at least to the level of the industry standard.
Credit representatives who provide mortgage broking services must:
- have at least a Certificate IV in Financial Services (Finance/Mortgage Broking)
- undertake 20 hours of continuing professional development each year.
See Regulatory Guide 206 Credit licensing: Competence and training (RG 206) for more information.
A credit representative must be a member of AFCA.
If the credit representative does not have AFCA membership at the time of authorisation, the authorisation has no effect. If a credit representative ceases to be a member of AFCA, the authorisation ceases to have effect.
A licensee must give written notice to any person they authorise as a credit representative. A licensee must also give its written consent to enable a body corporate credit representative to sub-authorise a natural person to engage in credit activities on behalf of the licensee.
A body corporate that is a credit representative of a licensee must give written notice to any person they sub-authorise.
Both the credit representative and the licensee should retain a copy of the consent for their records.
Licensees have a continuous obligation to monitor and supervise their representatives to ensure that they are adequately trained and competent to act as their credit representative and are complying with the credit legislation.
See Regulatory Guide 205 Credit licensing: General conduct obligations (RG 205) for more information.
If for any reason the appointment becomes legally invalid after it has been made, you must cease that representative and notify us.
Licensees and corporate credit representatives must tell us when:
- they authorise or sub-authorise a credit representative
- the registered details of a credit representative have changed
- the authorisation has been revoked or varied.
You can notify ASIC online using the Credit portal.
Details that must be provided about credit representatives
On the appointment of a credit representative, the licensee or the corporate credit representative must notify ASIC of the following details about the credit representative:
- the date of authorisation
- their credit representative number (if an existing credit representative). We maintain a register of credit representatives which includes a unique credit representative number
- their name, date and place of birth, or body corporate name and ABN
- their principal business address (and an alternative address if applicable)
- details of their AFCA membership.
Details needed if a credit representative also represents other licensees
If the credit representative also represents other credit licensees, the licensee or corporate credit representative must notify ASIC:
- of the credit licence number and name of the other licensee
- whether the other licensee has consented to the credit representative also representing the licensee making the notification
- whether the licensee is a related body corporate of the licensee making the notification.
Details needed if a credit representative is a body corporate
For a credit representative that is a body corporate they must have written consent to authorise a natural person to engage in credit activities on behalf of the licensee making the notification.
What to do when a credit representative doesn't have the same authorisations as the licensee
If the credit representative does not have exactly the same authorisations as the licensee, we must be advised of the activities the credit representative can engage in on behalf of the licensee.
The licensee or the corporate credit representative must also ensure that the following statements are true for this credit representative:
- A banning order or disqualification order under Part 2–4 of the National Consumer Credit Protection Act 2009 (the National Credit Act) is not in force against the person, body corporate, partnership or multiple trustee in relation to a credit activity included in the authorisation.
- The person, body corporate, partnership or multiple trustee is not banned from engaging in a credit activity under a law of a state or territory.
- The person has not been convicted, within the last 10 years, of serious fraud (does not apply to a credit representative that is a body corporate, a partnership or a multiple trustee).
- A prescribed state or territory order is not in force against:
- the person
- 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
- a partner or a trustee who would perform duties in relation to the credit activities specified in the authorisation.
A maximum of 200 notifications can be made on the standard forms for online notification. If you need to make more than 200 notifications, you will have to lodge an additional form.
There is no charge for lodging these forms online, but if lodged after the lodgement period, late fees apply.
XML Schema to facilitate bulk authorisation uploads
We have provided an XML schema to facilitate bulk uploads. It is standard industry practice to use XML schemas to define message content (Elements, Element Order and Element Types).
The online forms allow XML file attachments with representative details. This loads the information you provide into the online form without you having to key it in yourself.
The data must comply with the XML schema and with our business rules or it will not be accepted.
Licensees can authorise a body corporate as a credit representative. As bodies corporate can only engage in credit activities through the conduct of a natural person they may, with the consent of the licensee, sub-authorise a natural person or persons to engage in credit activities on behalf of the licensee. No other form of sub-authorisation is permitted under the National Credit Act.
Sub-authorised representatives are regarded as the credit representatives of the licensee, not of the corporate credit representative. The corporate credit representative must be a member of AFCA. There is no requirement for individual directors and employees sub-authorised by a body corporate credit representative to hold separate AFCA membership.
The employees and directors of a credit licensee (or of a related body corporate of the licensee) do not need to be formally authorised. They can act as representatives of the licensee without a formal authorisation.
Unless the individual partners who engage in credit activities on behalf of the partnership are?‘employees’ of the partnership, they must be authorised as credit representatives.
A partner authorised as a credit representative must have separate AFCA membership.
Where can I get more information?
- Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165)
- Regulatory Guide 267 Oversight of the Australian Financial Complaints Authority (RG 267)
- Contact us online or call 1300 300 630.
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. Omission of any matter on this information sheet will not relieve a company or its officers from any penalty incurred by failing to comply with the statutory obligations of the National Credit Act.
You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.
This is Information Sheet 126 (INFO 126), issued in October 2020.