NCCP Registration - "what does it mean today"
You would be aware that the new National Consumer Credit Protection (NCCP) Bill came into act on 1 July 2010. The first stage of this legislation is the registering with ASIC of all parties involved in the credit process. If you are not registered by 1/7/10, you can no longer be accredited with lenders or act as a broker. (New MFAA/FBAA memberships, their renewals, lender agreements aggregator agreements and PI renewal will require you to show compliance).
I suggest you don’t ignore this, and register as soon as possible as there will possibly be up to 25,000 people and entities registering. Registering does not mean you need to apply for a licence, it just gives you the ability to apply. Again, If you are not registered you cannot act as a broker.
You can register online with ASIC by clicking here (Between 1st April 2010 and 30th June 2010)What to do if you missed the deadline for credit registration
Click here for a step-by-step ASIC online registration guide
You have two choices under the new legislation:
- Get registered to obtain a Licence
- Become an authorised representative under a licence.
Either option will require you to register with ASIC. ASIC say that if you register after 18th June they will not guarantee registration prior to the commencement date.
- Registering To Become A Licence Holder
If you are thinking of registering to obtain a licence, it would need to be the same legal entity that the agreement is with your aggregator and any lenders. (i.e. the company or trust that has the agreement). Only individuals can register as authorised representatives.
Employees and directors of the licensed entity do not need to register as they are covered by the licence The entity needs to be registered. Contractors are required to be registered. If you hold the license you are responsible for the entire compliance requirements, processes training and record keeping etc for you and all the authorised reps. under your licence.
Applying for a licence (you need to have registered by 18 June 2010) will happen some time between 1/7/10 and 30/12/10, you will be required to provide along with the application three “checks” to show you are a “fit and proper person” these are:- Class 25 Federal Police Check – ASIC Financial Services Licensing Requirements – Valid 12 month – this is a different check to ones you might have previously had done.
- Bankruptcy Check (ITSA Bankruptcy check is conducted through a government) – Valid 12 month – This is new and has not been previously required by anyone
- VEDA credit check – Valid 3 months
- Become an authorised representative under a licence
Several aggregators and groups will offer you the opportunity to become an authorised representative under their licence. Most groups are still finalising the requirements and costs that will be associated to manage the compliance. This is due to the “grey” in the legislation and Professional Indemnity Insurance questions.
Aggregators in the Advantedge group have stated their preference is to have authorised representatives to make it easier for the member to manager this compliance. The have also said they will offer assistance for licence holders, again though no details are available. Most of the other aggregators have said their preference is to have individual license holders.
As an authorised representative you will have no option to do any sort of credit business that is not authorised by the licence or on their panel of lenders.
If you want to go this way then still register to ensure that you are compliant. You might even register as your business entity and as an individual so you can make the decision which way to go later when you have more information on or if the group you are with will offer be offering. This is the safest option and will give you the option of becoming a representative, Licence in your own name or licence in your business entity.
If you do not register your trading entity then you will be unable to licence it and will either need to licence in your name or become a rep under another license.
If you are planning to obtain your own license then I would suggest you start the process of getting the checks done now. Imagine the backlog of an additional 15,000 police checks needed in a short time frame. Currently these checks have been taking over a month already. ASIC say License holders have make the decision whether the authorised reps will require these checks. It has been suggested that most will as their licence will be at risk if ASIC don’t like the way they are operating.
To assist with this process we are agents for the required agencies including the Federal Police. The ITSA and Veda reports we can get instantly online for you. We will provide an updated VEDA check for you if necessary (Veda is only valid for 3 months, the other checks are 12 Months).
Further information is available at:
http://www.brokertraining.com.au/industry-guides/42-generalguides/120-registration-and-licencing-fundamentals.html
Please feel free to call our office if you would like to discuss what the licensing all means and your options.
