We have put together a list of the most common mistakes
licensees make that we have seen, and how to avoid them. Although
some of these are specific to the credit industry, many of the
points are applicable to AFSL holders as well.
Not having a compliance committee or not meeting
Appoint a compliance manager with responsibility for overseeing
compliance measures of the business. They should work in
collaboration with the compliance committee under the overall
Not keeping up to date with compliance
Create and maintain a compliance calendar to diarise key dates.
For example, PI insurance renewal, annual policy review, annual
compliance certificate due date and EDR membership renewal. Ensure
someone has responsibility to check the calendar and that key dates
Responsible Managers not completing their CPD
Ensure each responsible manager maintains their competence by
fulfilling their CPD requirements, for each calendar year.
Not keeping the training register up to
Ensure the training register for each responsible manager is
kept up to date. Make sure a specific person has responsibility for
this and encourage your staff to send updates on their training as
they complete it.
Not training representatives on legislative
Provide representatives with ongoing training in areas such as
misleading and deceptive conduct and related provisions of the ASIC Act, along with the basics of credit
regulation and the consumer credit legislative regime, to increase
understanding of legislative requirements for licensees. Provide
refresher training for all frontline staff on these and any other
Not keeping track of conflicts of
Identify conflicts of interest in the business, and consider
what measures are required to manage these conflicts to ensure the
consumer is not disadvantaged. Update the conflicts of interest
register accordingly. You may want to discuss conflicts with
colleagues in the industry to get a fresh perspective.
Not having up to date policies and
Licensees must internally review, and update all policies and
procedures regularly. These may include the risk management policy
and register, internal dispute resolution (IDR) policy, conflicts
policy, training policy and the monitoring and supervision policy.
We recommend reviewing your entire compliance
manual (or other policies and procedures document) annually.
Nominate one person to be responsible for the project and review
each individual policy to ensure that they are still current.
Not monitoring outsourced service
Develop and undertake a system of review for the performance of
outsourced service providers. Ensure you have current contracts on
file and use a formal system, such as a checklist, to review their
performance. We recommend you review all of your service providers
at least annually.
Not ensuring policies and procedures are compliant with
Ensure that the credit disclosure documents, including a credit
guide and a final assessment document, comply with the requirements
under the Act. Get advice or an independent review if you need a
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This newsletter includes links to recent documents relating to superannuation, funds management & financial services.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).