In our experience, the biggest hurdle in getting your own ACL is
having appropriate responsible managers ('RMs'). If you do
not have suitable RMs, ASIC will not issue an ACL. RMs demonstrate
that a licensee is competent to engage in credit activities. To
demonstrate that competence and be accepted by ASIC, RMs are
required to have specific qualifications and experience. An RM must
have a credit industry qualification to a least the Certificate IV
level (eg Certificate IV in Credit Management) or another general
higher level qualification in a relevant discipline (eg Bachelor of
Accounting). However, if you are going to be providing third party
home loan assistance, the RMs will need at least a Certificate IV
in Finance and Mortgage Broking. As well as qualifications, the RMs
will need at least two years problem free experience which is
relevant to the credit activities you will be engaging in.
Preferably the RM will have obtained that experience working for
another licensee in a similar business or will have been a credit
DIY or get the professionals in? After making the decision to
apply for your own the ACL, the next question is will you make the
application yourself or hire a consultant. This decision will be
based on a number of factors including time, cost and comfort. The
thought of drafting an application and interacting with ASIC can be
quite daunting, particularly if you have not done so before. Many
licensees get professional help when applying but many have also
successfully applied for a licence without help. ASIC's RG204
Applying for and varying a credit licence is worth a
read when making this decision.
ASIC requires a lot of information about your business and what
you are proposing to do. That information is provided in the
application form and several supporting documents. ASIC may request
clarification or further information during its assessment.
It is a requirement to have documented compliance procedures.
These procedures require a lot of detail and can be very time
consuming. If you decide to complete the application yourself, we
suggest that you consider purchasing a compliance manual from a
consultant to tailor to your business. It saves time and gives you
piece of mind that you haven't missed anything.
Before ASIC issues a licence, you will need to be a member of an
external dispute resolution scheme and have professional indemnity
insurance in place. Ensure that your policy meets the minimum
requirements detailed in ASIC's RG210 Compensation and insurance arrangements for credit
licensees. Applications are quite often delayed because
the applicant has to amend its policy.
In our experience, it generally takes 1-3 months from beginning
an application to ASIC making a decision whether or not to issue
Option 2: Become a Credit Representative
Becoming a credit representative of a credit licensee is another
option that can be taken if you want to provide credit assistance
Interested in expanding your business to provide credit
assistance to clients? Being a credit representative
allows you to test the waters and get a feel for what's
involved without having to use the same amount of resources,
economic and human, as a licensee. Your licensee is ultimately
responsible for your compliance with the credit laws and may
provide you with compliance procedures to follow and an approved
Eventually want your own licence but no one in the
business has credit experience? Becoming a credit
representative allows you to provide credit assistance and
accumulate experience that can be used to meet ASIC's
responsible manager requirements.
We have mentioned some of the positive aspects of becoming a
credit representative. There are some aspects that may not suit
everyone. As a licensee is responsible for its credit
representatives actions, it may restrict the products that you can
recommend and dictate how you conduct that part of your business.
There is also a cost involved which may be a flat monthly rate, a
percentage of your revenue from credit assistance, or a combination
of the two.
Being a credit representative might be likened to being a
grandparent. You get to be involved, with less responsibility, and
you don't have to worry about it over the weekend.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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