Australia: Compliance Insights: 2010 - A challenging year for financial service providers

Welcome to 2010, a year of many compliance challenges for financial services providers.

Legislation update

A number of important Bills were introduced into Federal Parliament in 2009. The status of these Bills and the dates on which the various legislative provisions come into operation are set out below:

Legislation Implementation dates
Corporations Legislation Amendment (Financial Services Modernisation) Act 2009

(Margin lending)
  • From 1 February 2010, ASIC will accept AFSL applications, or applications to vary an existing AFSL, from margin lenders or margin loans advisers.
  • Existing margin lenders and margin loans advisers must apply for an AFSL by 30 June 2010.
  • From 1 January 2011, the provisions of the Corporations Act 2001 apply to margin lenders and margin loans advisers.
  • From 1 July 2011, entities and individuals that provide financial product advice on margin lending facilities must comply with the training standing standards in ASIC Regulatory Guide 146

National Consumer Credit Protection Act 2009
  • Between 1 April and 30 June 2010, persons engaged in "credit activities" must apply to ASIC for registration if they wish to continue to engage in credit activities after 30 June 2010.
  • Registered persons must apply for a credit licence between 1 July and 31 December 2010.

Trade Practices Amendment (Australian Consumer Law) Bill The unfair contracts provisions of the Bill are expected to commence on 1 July 2010, although the Bill is yet to be passed by Federal Parliament.

If you haven't already done so, now is the time to consider the impact of this legislation on your organisation. Here are some initial steps you can take and issues you may wish to consider:

Margin lending

Most margin lenders and margin loans advisers supply or advise on other financial products and as a result, will already hold an AFSL. If this applies to you, you can apply to vary your existing licence to include margin lending by completing and lodging ASIC form FS03 online.

Regulatory Guide 2 AFS Licensing Kit: Part 2 - Preparing your AFS licence application and Regulatory Guide 3 AFS Licensing Kit: Part 3 - Preparing your additional proofs have been updated to take into account the inclusion of margin lending facilities as a financial product.


The first step is to determine whether or not a credit licence is required. ASIC Regulatory Guide 203 Do I need a credit licence explains what constitutes "credit activities".

Regulatory Guide 202 Credit registration and transition details the registration process. RG 202 suggests that applicants take the following steps before they begin preparing their application:

  • If you are a company or an AFS licensee, make sure your details on ASIC's registers are correct. An online application for registration cannot be completed until the registers are up to date.
  • Become a member of an ASIC approved external dispute resolution (EDR) scheme. An applicant cannot complete their application until they are a member of an EDR scheme.
  • In the registration application, you will need to make statements about the past conduct of directors, company secretaries, partners and trustees. In order for an applicant to be able make these statements, background checks of directors, company secretaries, partners and trustees must be conducted prior to completing the application.

It is important to note that unless ASIC has approved your application for registration by 30 June 2010, you will not be able to continue to engage in credit activities after this date. ASIC has stated that if an application for registration is lodged by 18 June, it will be able to make a decision on that application by 30 June 2010.

Unfair contracts

The Trade Practices Amendment (Australian Consumer Law) Bill, which prohibits unfair contracts, is yet to pass Federal Parliament. This means there may only be a few months between the passing of the legislation and the provisions coming into force. Given the difficulties this may pose, here are some suggested steps you can take now to prepare for the new requirements:

  • Collate all contracts currently used in consumer transactions. The new legislation will only apply to standard form "consumer contracts" - that is, contracts for the supply of goods or services or the sale or grant of an interest in land to an individual who makes the acquisition wholly or predominantly for personal, domestic or household use or consumption.
  • Identify provisions in these contracts that may require revision, based on the requirements of the Bill.
  • Consider the timeframe and resources you will require to comply with the legislation, once the Bill is passed.

More changes are on the way

In addition to those discussed above, further legislative changes affecting financial services providers are expected in 2010. For example, this year the Federal Government is expected to introduce legislation to implement the first stage of amendments to the Privacy Act 1988. These amendments will include amendments allowing for more comprehensive credit reporting.

We look forward to keeping you informed of new developments as and when they occur.

For further information, please contact Randal Dennings or Graeme Howatson.

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

Click to Login as an existing user or Register so you can print this article.

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”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.