Commonwealth Consolidated Regulations Commonwealth Consolidated Regulations(regulation 25E)
2.1 Subsection 5(1), after definition of carried on in this jurisdiction
insert
"carried over instrument" has the meaning given by subsection 4(1) of the Transitional Act.
2.2 Subsection 5(1), after definition of prescribed State or Territory order
insert
"prescribed unlicensed carried over instrument lender" has the meaning given by section 5A.
2.3 Subsection 5(1), after definition of registered company auditor
insert
"registered person" has the meaning given by subsection 4(1) of the Transitional Act.
2.4 Subsection 5(1), after definition of tribunal
insert
"unlicensed carried over instrument lender" means a credit provider or lessor who:
(a) was a credit provider or lessor in relation to a carried over instrument immediately before 1 July 2010; and
(b) on and after 1 July 2010 has been the credit provider or lessor in relation to the carried over instrument on a continuous basis; and
(c) is not any of the following persons:
(i) a licensee;
(ii) a registered person;
(iii) a person exempt from the requirement to hold a licence under this Act or to be a registered person under the Transitional Act.
2.5 After section 5
insert
5A Meaning of prescribed unlicensed carried over instrument lender
(1) A prescribed unlicensed carried over instrument lender means a person:
(a) for whom:
(i) a prescribed State or Territory order is in force; or
(ii) a banning or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is in force; or
(iii) a judgement has been entered against as a result of a civil action taken by an agency of a State or Territory government under the old Credit Code in the last 10 years; or
(b) who is banned from engaging in a credit activity under:
(i) a law of a State or Territory; or
(ii) Part 2 - 4; or
(c) who is disqualified from managing a corporation under Part 2D.6 of the Corporations Act 2001 ; or
(d) who has been convicted of a serious fraud during the last 10 years; or
(e) who is incapable of managing his or her affairs because of physical or mental incapacity; or
(f) who is not a trustee of a trust and who is insolvent; or
(g) who is or has been registered to engage in credit activities under Schedule 2 to the Transitional Act and whose registration was suspended or cancelled under item 23 of Schedule 2 to the Transitional Act, other than under paragraph 23(1)(a) or (b); or
(h) who is or has been the holder of an Australian credit licence and whose licence is suspended or was cancelled under section 54, other than under paragraph 54(1)(a) or (b); or
(i) who is or has been the holder of an Australian financial services licence and whose licence is suspended or was cancelled under section 915B of the Corporations Act 2001 , other than under any of the following paragraphs of that Act:
(i) paragraphs 915B(1)(a) or (e);
(ii) paragraphs 915B(2)(a) or (d);
(iii) paragraphs 915B(3)(a) or (d);
(iv) paragraphs 915B(4)(a) or (d).
(2) In this section person means:
(a) if the person is a natural person--that person; and
(b) if the person is a body corporate--each director or secretary of the body corporate; and
(c) if the person is a partnership or a trustee of a trust--each partner of the partnership or each trustee of the trust.
2.6 Chapter 2, heading
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Chapter 2--Unlicensed carried over instrument lenders
2.7 Part 2 - 1, Divisions 1 and 2
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2.8 Section 30
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2.9 Subsection 31(1)
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A licensee
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An unlicensed carried over instrument lender
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2.11 Part 2 - 2, heading
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Part 2 - 2--Obligations of unlicensed carried over instrument lenders
2.12 Part 2 - 2, Divisions 1 to 3
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2.12A Part 2 - 2, Division 4 heading
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Division 4--Conditions for unlicensed carried over instrument lender
2.13 Section 45
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45 Conditions for unlicensed carried over instrument lender
(1) This section applies to an unlicensed carried over instrument lender who engages in a credit activity in relation to a carried over instrument.
(2) The lender in relation to the credit activity in relation to the instrument is subject to the conditions prescribed in the regulations.
2.14 Section 46
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2.15 Part 2 - 2, Division 5, heading
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Division 5--General obligations
2.16 Section 47, heading
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47 General conduct obligations of unlicensed carried over instrument lender
2.17 Subsection 47(1)
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(1) An unlicensed carried over instrument lender must:
(a) do all things necessary to ensure that the credit activities engaged in in relation to the carried over instrument are engaged in efficiently, honestly and fairly; and
(b) have in place adequate arrangements to ensure that its clients are not disadvantaged by any conflict of interest in relation to a carried over instrument that may arise wholly or partly in relation to credit activities engaged in by it or its representatives; and
(c) ensure that its representatives are adequately trained and competent to engage in the credit activities in relation to the carried over instrument; and
(d) maintain its competence to engage in the credit activities in relation to the carried over instrument; and
(e) have an internal dispute resolution procedure that:
(i) complies with standards and requirements made or approved by ASIC in accordance with section 48; and
(ii) covers disputes in relation to the credit activities the lender engages in in relation to the carried over instrument; and
(f) if the lender is not a member of the AFCA scheme:
(i) keep a register of complaints in relation to carried over instruments and include the information mentioned in subsection (1A); and
(ii) keep a register of applications by a debtor for changes to the terms a credit contract under section 72 of the National Credit Code and include the information mentioned in subsection (1B); and
(iii) keep a register of requests by a debtor, mortgagor or guarantor to negotiate a postponement of enforcement proceedings in relation to the credit contract, mortgage or guarantee under section 94 of the National Credit Code and include the information mentioned in subsection (1C); and
(g) have adequate arrangements and systems to ensure compliance with its obligations under this section, and a written plan documenting those arrangements and systems; and
(h) unless the unlicensed carried over instrument lender is a body regulated by APRA:
(i) have adequate resources (including financial, technological and human resources) available so it can engage in credit activities in relation to the carried over instrument and to carry out supervisory arrangements; and
(ii) have adequate risk management systems.
(1A) For the purposes of subparagraph (1)(f)(i), the information is:
(a) the name of the person making the complaint; and
(b) the date the complaint was made; and
(c) details of the substance of the complaint; and
(d) details of the outcome of the compliant.
(1B) For the purposes of subparagraph (1)(f)(ii), the information is:
(a) the name of the person making the application; and
(b) the date the application was made; and
(c) details of the information included in the application; and
(d) details of the written notice given under subsection 72(3) of the National Credit Code.
(1C) For the purposes of subparagraph (1)(f)(iii), the information is:
(a) the name of the person making the request; and
(b) the date the request was made; and
(c) details of the information included in the request; and
(d) details of the written notice given under subsection 94(2) of the National Credit Code.
2.18 Subsection 47(2)
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For the purposes of paragraphs (1)(b), (g), (k) and (l),
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For the purposes of paragraphs (1)(b), (c), (g) and (h),
2.18A Subsection 47(2)
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licensee
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unlicensed carried over instrument lender
2.19 Subsection 47(3), including subsection heading
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2.20 Section 48
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48 Standards or requirements for internal dispute resolution approved or made by ASIC
(1) ASIC must take the following matters into account when considering whether to approve standards or requirements for internal dispute resolution for an unlicensed carried over instrument lender:
(a) Australian/New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organizations published jointly by, or on behalf of, Standards Australia and Standards New Zealand, as in force or existing on 29 October 2014;
(b) any other matters ASIC considers relevant.
(2) ASIC may vary or revoke:
(a) a standard or requirement that it has made in relation to an internal dispute resolution procedure; and
(b) the operation of a standard or requirement that it has approved in its application to an internal dispute resolution procedure.
2.21 Section 49, heading
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49 Obligation to provide a statement or audit report
2.22 Subsections 49(1) to (3)
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licensee
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unlicensed carried over instrument lender
2.23 After subsection 49(3)
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Requirement to lodge audit report
(3A) An unlicensed carried over instrument lender who is not a member of the AFCA scheme must lodge with ASIC an audit report, prepared by a suitably qualified person and in accordance with subsection (10), about whether the lender has complied with the following requirements in relation to a carried over instrument for the lender:
(a) if the carried over instrument is a credit contract--the requirements mentioned in section 17 of the National Credit Code;
(b) if the carried over instrument is a consumer lease--the requirements mentioned in section 174 of the National Credit Code.
Civil penalty: 5,000 penalty units.
2.24 Subsections 49(5) and (6)
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licensee
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unlicensed carried over instrument lender
2.25 After subsection 49(9)
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When audit report due
(10) For subsection (3A), the unlicensed carried over instrument lender must lodge the audit report with ASIC on or before 31 December 2010. ASIC may extend the day by giving written notice to the lender.
2.26 Subsections 50(1) and (2), including subsection headings and penalty
substitute
Requirement to give information
(1) ASIC may request an unlicensed carried over instrument lender to give ASIC information about the registers the lender is required to keep under paragraph 47(1)(f).
(2) If ASIC requests the lender give ASIC the information mentioned in subsection (1), the lender must give ASIC the information.
Civil penalty: 5,000 penalty units.
2.26A Subsection 51(1)
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licensee
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unlicensed carried over instrument lender
2.27 Section 52
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52 Obligation to lodge certain matters with ASIC
Requirement to lodge report of contravention or likely contravention
(1) If an unlicensed carried over instrument lender is not a member of the AFCA scheme and the lender becomes aware of a contravention, or a likely contravention, mentioned in subsection (2), the lender must lodge a written report with ASIC on the matter:
(a) as soon as practicable; and
(b) in any case no later than 10 business days after becoming aware of the contravention or likely contravention.
Civil penalty: 5,000 penalty units.
When there is a contravention or likely contravention
(2) For the purposes of subsection (1), there is a contravention, or a likely contravention, if:
(a) the unlicensed carried over instrument lender contravenes, or is likely to contravene, this Act, the Transitional Act or the ASIC Act; and
(b) the contravention, or likely contravention, is significant having regard to the following:
(i) the number and frequency of similar previous contraventions;
(ii) the impact of the contravention, or likely contravention, on the lender's ability to engage in the credit activities;
(iii) the extent to which the contravention, or likely contravention, indicates that the lender's arrangements to ensure compliance with its obligations under this Part are inadequate;
(iv) the actual or potential financial loss to consumers, or the lender itself, arising from the contravention, or likely contravention.
(3) For the purposes of subsection (2), an unlicensed carried over instrument lender is likely to contravene an obligation referred to in that subsection if, and only if, the person is no longer able to comply with the obligation.
Offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Strict liability offence
(5) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 20 penalty units.
(6) Subsection (5) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
2.28 Subsection 53(1)
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A licensee must, no later than 45 days after the licensee's licence anniversary in each year,
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An unlicensed carried over instrument lender must, no later than 15 August in 2011 and each subsequent year,
2.29 Subsection 53(1)
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to the licensee.
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to the unlicensed carried over instrument lender.
2.30 Paragraph 53(3)(a)
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licensee
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unlicensed carried over instrument lender
2.31 Paragraph 53(3)(b)
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(b) if the unlicensed carried over instrument lender is a body corporate--a kind of person mentioned in subsection 53(7); or
2.32 Paragraph 53(3)(c)
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licensee
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unlicensed carried over instrument lender
2.33 Subsection 53(4)
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licensee
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unlicensed carried over instrument lender
2.34 Subsection 53(7), including subsection heading
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Kinds of persons
(7) For paragraph (3)(b), the kinds of persons are:
(a) if the body corporate is not an ADI:
(i) the Chief Executive Officer of the body corporate; or
(ii) if the body corporate does not have a Chief Executive Officer--the person who:
(A) is responsible for managing the affairs of the body corporate; and
(B) has authority to make decisions in relation to the allocation of resources so that the body corporate complies with the Act; and
(b) if the body corporate is an ADI:
(i) the Chief Executive Officer of the body corporate; or
(ii) a person who satisfies the criteria to be a fit and proper person to hold a responsible person position under Prudential Standard APS 520.
Note: Prudential Standard APS 520 is in Schedule 1 to the Banking (prudential standard) determination No. 1 of 2006--Prudential Standard APS 520 Fit and Proper.
2.35 Division 6, Part 2 - 2
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2.36 Part 2 - 3, heading
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Part 2 - 3--Representatives of unlicensed carried over instrument lender
2.37 Part 2 - 3, Divisions 1 and 2
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2.38 Section 73, including the heading and subsection headings
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licensee
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unlicensed carried over instrument lender
2.39 Part 2 - 3, Division 4
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Division 4--Appointment of licensee or registered person to act on behalf of prescribed unlicensed carried over instrument lender
74 Obligation for prescribed unlicensed carried over instrument lender to appoint licensee or registered person
(1) This section applies to a prescribed unlicensed carried over instrument lender on or after 1 July 2010.
(2) The prescribed unlicensed carried over instrument lender:
(a) must not engage in a credit activity in relation to a carried over instrument (other than the credit activity that is engaged in solely by the lender being the credit provider under a credit contract or the lessor under a consumer lease); and
(b) must appoint, in writing, a licensee or registered person as the lender's representative to engage in a credit activity in relation to the carried over instrument (other than the credit activity that is engaged in solely by the lender being the status of the credit provider under a credit contract or the lessor under a consumer lease) on behalf of the lender.
Civil penalty: 5,000 penalty units.
Note: Having the status of a credit provider under a credit contract or a lessor under a consumer lease is itself a credit activity.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (2); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Strict liability offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (2); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 20 penalty units.
(5) Subsection (4) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
75 Lodgment obligations for prescribed unlicensed carried over instrument lender
(1) If a licensee or registered person is appointed by a prescribed unlicensed carried over instrument lender to act on the lender's behalf, the lender must lodge with ASIC, no later than 15 business days after the appointment is made:
(a) a copy of the appointment under section 74; and
(b) a document, in an approved form, setting out the following information:
(i) the basis, under section 5A, on which the lender is a prescribed unlicensed carried over instrument lender;
(ii) the licensee's or registered person's name (including the licensee's or registered person's principal business name if any);
(iii) the postal address of the licensee or registered person;
(iv) if the principal business address of the licensee or registered person is different from the postal address--the principal business address.
Civil penalty: 5,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Strict liability offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 20 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
75A Obligation for prescribed unlicensed carried over instrument lender if appointment of licensee or registered person ceases
(1) This section applies if a licensee or registered person is appointed, in accordance with paragraph 74(2)(b), by a prescribed unlicensed carried over instrument lender to engage in a credit activity mentioned in that paragraph on behalf of the lender.
(2) The appointment is continuous until the first of the following events occurs:
(a) the licensee, or registered person dies or otherwise ceases to engage in the business;
(b) the licensee, or registered person is unable to perform its duties.
(3) If the licensee's or registered person's appointment ceases under subsection (2):
(a) section 74 applies to the prescribed unlicensed carried over instrument lender as if it required the lender to appoint another licensee or registered person to engage in a credit activity, as described in paragraph 74(2)(b), on behalf of the lender no later than 15 business days after the previous appointment ceased; and
(b) section 75 applies to the prescribed unlicensed carried over instrument lender in relation to the appointment.
75B Obligation if person ceases to be prescribed unlicensed carried over instrument lender
(1) If a person is a prescribed unlicensed carried over instrument lender because a matter mentioned in subsection 5A(1) applies to the person and the matter ceases to apply to the person, the person must lodge with ASIC a notice, in an approved form and no later than 15 business days after the day on which the matter ceases to apply to the person, that the matter has ceased to apply to the person.
Civil penalty: 5,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Strict liability offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 20 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code .
76 Lodgement obligation for licensee or registered person acting on behalf of prescribed unlicensed carried over instrument lender
(1) If a licensee or registered person is appointed by a prescribed unlicensed carried over instrument lender to act on the lender's behalf, the licensee or registered person must lodge with ASIC a notice, in an approved form, of the appointment no later than 15 business days after the appointment.
Civil penalty: 5,000 penalty units.
Offence
(2) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Strict liability offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 20 penalty units.
(4) Subsection (3) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
2.39B Part 2 - 4
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2.39C Part 2 - 5, heading
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Part 2 - 5--Financial records and audit reports
2.40 Section 87
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2.40A Subsection 88(1)
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A licensee
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An unlicensed carried over instrument lender
2.40B Subsection 88(1)
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licensee.
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lender.
2.40C Paragraph 88(2)(c)
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2.40D Subsection 88(4)
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A licensee
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An unlicensed carried over instrument lender
2.40E Subsection 88(4)
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licensee.
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lender.
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licensee
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unlicensed carried over instrument lender
2.42 Section 94, heading
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94 Financial records taken to be made with unlicensed carried over instrument lender's authority
2.43 Section 94
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licensee.
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unlicensed carried over instrument lender.
2.44 Subsection 95(1)
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A licensee
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An unlicensed carried over instrument lender
2.45 Subsection 96(2)
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licensee
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unlicensed carried over instrument lender
2.46 Part 2 - 5, Division 3
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2.47 Subsection 102(1)
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(1) An auditor (the auditor ) who prepares an audit report required under subsection 49(3) or 49(3A) in relation to an unlicensed carried over instrument lender has a right of access at all reasonable times to the financial records or other credit books of the lender for purposes relating to the audit report.
2.48 Subsections 102(2) and (3)
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licensee
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unlicensed carried over instrument lender
2.49 Section 103
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licensee
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unlicensed carried over instrument lender
2.50 Paragraph 104(1)(b)
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licensee
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unlicensed carried over instrument lender
2.51 Paragraph 104(2)(a)
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licensee to meet the licensee's obligations as a licensee; or
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unlicensed carried over instrument lender to meet its obligations under section 47 or the National Credit Code; or
2.52 Paragraph 104(2)(b)
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(b) constitutes or may constitute a contravention of section 47 or Division 2; or
2.53 Section 105
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licensee
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unlicensed carried over instrument lender
2.53A Paragraph 106(b)
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