NATIONAL CONSUMER CREDIT PROTECTION (TRANSITIONAL AND CONSEQUENTIAL PROVISIONS) ACT 2009 (NO. 135, 2009) - SCHEDULE 2 Registration of persons to engage in credit activities

Commonwealth Numbered Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

NATIONAL CONSUMER CREDIT PROTECTION (TRANSITIONAL AND CONSEQUENTIAL PROVISIONS) ACT 2009 (NO. 135, 2009) - SCHEDULE 2

Registration of persons to engage in credit activities

1 Guide to this Schedule

This Schedule is about the registration of persons to engage in credit activities. Registration is a transitional authorisation to engage in credit activities. It applies in the period before all persons who engage in credit activities are required to be licensed under Chapter 2 of the National Credit Act.

Regulations made under section 6 may also deal with transitional matters relating to the registration of persons to engage in credit activities. Those regulations may provide for matters in addition to those provided in this Schedule and they may modify how this Schedule applies.

This Part deals with how certain provisions of Part 1‑2 (which deals with definitions) of the National Credit Act apply in relation to this Schedule.

Divisions 1 and 2 of Part 2 set out requirements that apply to persons who engage in credit activities during particular transitional periods.

Division 3 of Part 2 deals with how the requirements in Division 3 of Part 2‑1 (which deals with certain requirements in relation to credit activities) of the National Credit Act apply in relation to registered persons.

Part 3 deals with how a person becomes registered, the conditions on registration, the obligations of a registered person, and the suspension and cancellation of registration.

Part 4 deals with how other provisions of the National Credit Act apply in relation to registered persons. These provisions include Part 2‑3 (which deals with credit representatives and other representatives), Part 2‑4 (which deals with banning and disqualification) and Divisions 2 and 4 of Part 2‑5 (which deal with financial records and auditors) of the National Credit Act.

Part 5 deals with exemptions from, and modifications of, certain provisions of this Schedule.

Part 6 allows regulations to provide for infringement notices in relation to the civil penalty provisions and offences in this Schedule.

2 Application of Part 1‑2 of the National Credit Act

Part 1‑2 (which deals with definitions) of the National Credit Act applies as if the references in sections 10, 14, 15 and 16 to "this Act" were references to "this Act and Schedule 2 to the Transitional Act".

Note: Expressions that are defined in the National Credit Act (other than the new Credit Code) have the same meanings in this Act as they have in the National Credit Act: see subsection 4(2).

Part 2 -- Transitional prohibitions relating to credit activities

Division 1--Prohibition that applies only from commencement to 31 December 2010, or later prescribed day

3 Application of this Division

This Division applies during the period that:

(a) starts on commencement; and

(b) ends on 31 December 2010, or a later day prescribed by the regulations.

4 Prohibition on engaging in credit activities if not registered or licensed during the period

Prohibition on engaging in credit activities if not registered or licensed

(1) A person must not engage in a credit activity unless:

(a) the person is registered to engage in the credit activity; or

(b) the person holds a licence authorising the person to engage in the credit activity.

Civil penalty: 2,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subitem (1); and

(b) the person engages in conduct; and

Criminal penalty: 200 penalty units, or 2 years imprisonment, or both.

Defences

(3) For the purposes of subitems (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal ); and

(b) the person is:

(i) an employee or director of the principal or of a related body corporate of the principal; or

(ii) a credit representative of the principal; and

(d) the principal is registered to engage in the credit activity, or holds a licence authorising the principal to engage in the credit activity.

Note: For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (3): see subsection 13.3(3) of the Criminal Code .

(4) For the purposes of subitems (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal ); and

(b) the person is a representative of the principal; and

(d) the principal is exempted from subitems (1) and (2) under paragraph 41(1)(a), 41(3)(a) or 42(a).

Note: For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (4): see subsection 13.3(3) of the Criminal Code .

Division 2--Prohibition that applies only from 1 January 2011, or later prescribed day, to the transition end day

5 Application of this Division

This Division applies during the period that:

(a) starts immediately after the end of the period referred to in item 3; and

(b) ends on the transition end day.

6 Prohibition on engaging in credit activities in certain circumstances during the period

Prohibition on engaging in credit activities in certain circumstances

(1) A person must not engage in a credit activity unless:

(a) the person:

(i) is registered to engage in the credit activity; and

(ii) has applied for a licence authorising the person to engage in the credit activity in accordance with section 36 of the National Credit Act; or

(b) the person holds a licence authorising the person to engage in the credit activity.

Civil penalty: 2,000 penalty units.

Offence

(2) A person commits an offence if:

(a) the person is subject to a requirement under subitem (1); and

(b) the person engages in conduct; and

Criminal penalty: 200 penalty units, or 2 years imprisonment, or both.

Defences

(3) For the purposes of subitems (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal ); and

(b) the person is:

(i) an employee or director of the principal or of a related body corporate of the principal; or

(ii) a credit representative of the principal; and

(d) the principal:

(i) is registered to engage in the credit activity, and has applied for a licence authorising the principal to engage in the credit activity in accordance with section 36 of the National Credit Act; or

(ii) holds a licence authorising the principal to engage in the credit activity.

Note: For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (3): see subsection 13.3(3) of the Criminal Code .

(4) For the purposes of subitems (1) and (2), it is a defence if:

(a) the person engages in the credit activity on behalf of another person (the principal ); and

(b) the person is a representative of the principal; and

(d) the principal is exempted from subitems (1) and (2) under paragraph 41(1)(a), 41(3)(a) or 42(a).

Note: For the purposes of subitem (2), a defendant bears an evidential burden in relation to the matter in subitem (4): see subsection 13.3(3) of the Criminal Code .

Division 3--Application of Division 3 of Part 2‑1 of the National Credit Act in relation to registered persons and this Schedule

7 Application of this Division

This Division applies during the period that:

(a) starts at commencement; and

(b) ends on the transition end day.

8 Application of section 30 of the National Credit Act

Section 30 (which deals with prohibitions on holding out and advertising etc.) of the National Credit Act applies as if:

(a) the reference in paragraph 30(1)(a) of the National Credit Act to a person holding a licence were a reference to a person holding a licence or being registered; and

(b) the reference in paragraph 30(1)(b) of the National Credit Act to a person holding a licence authorising the person to engage in a particular credit activity were a reference to a person holding a licence authorising the person to engage in a particular credit activity, or being registered to engage in a particular credit activity; and

(c) the reference in paragraph 30(1)(c) of the National Credit Act to a requirement to hold a licence were a reference to a requirement to hold a licence or be registered; and

(d) the reference in paragraph 30(1)(e) of the National Credit Act to a licensee were a reference to a licensee or registered person; and

(e) the reference in subsection 30(2) of the National Credit Act to contravening section 29 of the National Credit Act were a reference to contravening section 29 of the National Credit Act or item 4 or 6 of this Schedule.

9 Application of section 31 of the National Credit Act

Section 31 (which deals with a prohibition on conducting business with unlicensed persons) of the National Credit Act applies as if:

(a) the reference in subsection 31(1) to a licensee were a reference to a registered person or licensee; and

(b) the reference in subsection 31(1) to contravening section 29 of the National Credit Act were a reference to contravening section 29 of the National Credit Act or item 4 or 6 of this Schedule.

10 Application of section 32 of the National Credit Act

Section 32 (which deals with a prohibition on charging a fee etc.) of the National Credit Act applies as if the reference in subsection 32(1) to section 29 of that Act were a reference to section 29 of that Act or item 4 or 6 of this Schedule.

Part 3 -- Registration of persons who engage in credit activities

Division 1--How to become registered

11 Applying to be registered

(1) A person may apply to be registered by lodging an application with ASIC.

(2) The application must be lodged during the period that:

(a) starts on 1 April 2010, or a later day prescribed by the regulations; and

(b) ends on 30 June 2010, or a later day prescribed by the regulations.

(3) The application must be in the approved form.

12 When a person may be registered

When ASIC must register a person

(1) ASIC must register a person (the applicant ) if (and must not register the applicant unless):

(a) the applicant has applied to be registered in accordance with item 11; and

(b) the application makes a statement that the applicant is a member of an approved external dispute resolution scheme; and

(i) the applicant;

(ii) if the applicant is a body corporate--each director or secretary of the body corporate who would perform duties in relation to the credit activities to be authorised by the registration;

(iii) if the applicant is a partnership or the trustees of a trust--each partner or trustee who would perform duties in relation to the credit activities to be authorised by the registration.

(2) For the purposes of paragraph (1)(c), the statement is that:

(a) a banning order or disqualification order under Part 2‑4 of the National Credit Act is not in force against the person; and

(b) a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is not in force against the person; and

(d) if the person is or has been registered--the person's registration is neither suspended nor cancelled; and

(e) an Australian financial services licence of the person is neither suspended, nor has been cancelled within the last 7 years, under:

(i) paragraph 915B(1)(d) or subparagraph 915B(4)(b)(iii) of the Corporations Act 2001 (which deals with suspension or cancellation because of mental or physical incapacity); or

(ii) section 915C of the Corporations Act 2001 (which deals with suspension or cancellation after offering a hearing); and

(f) if the person is not the trustees of a trust--the person is not insolvent; and

(g) if the person is a natural person:

(i) the person is not disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001 ; and

(ii) the person has not been convicted, within 10 years before the application is made, of serious fraud; and

(iii) a prescribed State or Territory order is not in force against the person.

(2A) For the purposes of paragraph (2)(c), a reference to a credit activity in the definitions of banned from engaging in a credit activity under a law of a State or Territory and State or Territory credit licence in subsection 5(1) of the National Credit Act (as those definitions apply for the purposes of this Act because of subsection 4(2) of this Act) includes a reference to an activity that would be a credit activity if the new Credit Code had applied from the day section 3 of the National Credit Act commences.

ASIC may refuse to register a person in certain circumstances

(3) Despite subitem (1), ASIC may refuse to register a person if ASIC has reason to believe that:

(a) the application is false in a material particular or materially misleading; or

(b) there is an omission of a material matter from the application.

Notice of decision on application

(4) ASIC must give the applicant written notice of:

(a) ASIC's decision on the application; and

(b) if the decision is to register the applicant--the day on which the applicant becomes registered; and

When applicant becomes registered

(5) The applicant becomes registered when ASIC enters the applicant's name on a credit register as a registered person.

13 Basis on which a person is registered

A person who is registered under this Division is registered on the basis that:

(a) conditions on the registration may be imposed, varied or revoked under item 14 or 15; and

(b) the registration may be suspended under item 22, 23, 24 or 25; and

(d) the registration may be varied under item 26; and

(e) the registration may be cancelled, revoked, terminated or varied by or under later legislation; and

(f) no compensation is payable if:

(i) conditions on the registration are imposed, varied or revoked as referred to in paragraph (a); or

(ii) the registration is suspended, cancelled, varied, revoked or terminated as referred to in paragraphs (b) to (e).

Division 2--The conditions on the registration

14 The conditions on the registration

ASIC may impose, vary or revoke conditions on registrations

(1) ASIC may, at any time:

(a) impose conditions, or additional conditions, on a person's registration; and

(b) vary or revoke conditions imposed on a person's registration.

(2) ASIC may do so:

(a) on its own initiative; or

(b) if the registered person lodges an application with ASIC for the imposition, variation or revocation.

(3) The application must be in the approved form.

Notice and effect of imposition, variation or revocation of conditions

(4) ASIC must give the registered person written notice of the imposition, variation or revocation of the conditions. The imposition, variation or revocation of the conditions comes into force on the day specified in the notice, which must not be before the day on which the decision to impose, vary or revoke the conditions was made.

ASIC must give the registered person a hearing

(5) Despite subitem (1), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the registration after giving the registered person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC in relation to the conditions.

This subitem does not apply to ASIC imposing conditions when a person becomes registered.

Condition in relation to credit activities authorised

(6) ASIC must ensure that the registration is subject to a condition that specifies the credit activities or classes of credit activities that the registered person is authorised to engage in.

Regulations may prescribe conditions

(7) The registration is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.

15 Registration conditions--special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

(1) If the registered person, or a related body corporate, is a body (the APRA body ) regulated by APRA (other than an ADI), then the following provisions apply:

(a) ASIC cannot:

(i) impose, vary or revoke a condition on the registration that, in ASIC's opinion, has or would have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities); or

(ii) vary a condition so that it would, in ASIC's opinion, become a condition that would have a result as described in subparagraph (i);

unless ASIC has first consulted APRA about the proposed action;

(b) if ASIC imposes, varies or revokes a condition on the registration and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

(2) If the registered person, or a related body corporate, is an ADI, then the following provisions apply:

(a) subject to paragraphs (b) and (c), the powers that ASIC would otherwise have under item 14:

(i) to impose, vary or revoke a condition on the registration that, in ASIC's opinion, has or would have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959 ); or

(ii) to vary a condition so that it would, in ASIC's opinion, become a condition that would have a result as described in subparagraph (i);

are instead powers of the Minister;

(b) the following provisions apply in relation to a power to which paragraph (a) applies:

(i) the procedures for the exercise of the power are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

(ii) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 14(5)(a) and receive any submissions under paragraph 14(5)(b);

(c) if ASIC imposes, varies or revokes a condition on the registration and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Division 3--Obligations of registered persons

15A Application of this Division

This Division (other than subitem 16(1)) applies during the period that:

(a) starts on commencement; and

(b) ends on the transition end day.

16 General conduct obligations of registered persons

Obligation to be a member of an approved external dispute resolution scheme

(1) During the period that:

(a) starts at the same time as the start of the period referred to in subitem 11(2); and

(b) ends on the transition end day;

a registered person must be a member of an approved external dispute resolution scheme.

Other general conduct obligations of registered persons

(3) A registered person must:

(a) do all things necessary to ensure that the credit activities authorised by the registration are engaged in efficiently, honestly and fairly; and

(b) comply with the conditions on the registration; and

(d) take reasonable steps to ensure that its representatives comply with the credit legislation; and

(e) take reasonable steps to ensure that clients of the registered person are not disadvantaged by any conflict of interest that arises wholly or partly in relation to credit activities engaged in by the registered person or its representatives; and

(f) comply with any other obligations that are prescribed by the regulations.

17 Obligation to provide a statement or obtain an audit report if directed by ASIC

Notice to registered person to provide a statement

(1) ASIC may give a registered person a written notice directing the registered person to lodge with ASIC a written statement containing specified information about the credit activities engaged in by the registered person or its representatives.

(2) Notices under subitem (1):

(a) may be given at any time; and

(b) may be given to one or more particular registered persons, or to each registered person in one or more classes of registered persons, or to all registered persons; and

(d) may require a statement containing information to be provided on a periodic basis, or each time a particular event or circumstance occurs, without ASIC having to give a further written notice.

Notice to registered person to obtain an audit report

(3) ASIC may also give a registered person a written notice directing the registered person to obtain an audit report, prepared by a suitably qualified person specified in the notice, on a statement, or each statement in a class of statements, under subitem (1) before the statement is given to ASIC.

(4) A notice under subitem (3) is not a legislative instrument.

Notice must specify day by which registered person must comply

(5) A notice given under this item must specify the day by which the registered person must comply with the notice (which must be a reasonable period after the notice is given). ASIC may extend the day by giving a written notice to the registered person.

Requirement to comply with notice

(6) The registered person must comply with a notice given under this item within the time specified in the notice.

Civil penalty: 2,000 penalty units.

Offence

(7) A person commits an offence if:

(a) the person is subject to a requirement under subitem (6); and

(b) the person engages in conduct; and

Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.

Strict liability offence

(8) A person commits an offence if:

(a) the person is subject to a requirement under subitem (6); and

(b) the person engages in conduct; and

Criminal penalty: 10 penalty units.

(9) Subitem (8) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code .

18 Obligation to give ASIC information required by the regulations

Regulations may require registered person to give information

(1) The regulations may require a registered person, or each registered person in a class of registered persons, to give ASIC specified information about the credit activities engaged in by the registered person or its representatives.

Requirement to comply with regulations

(2) If regulations under subitem (1) require a registered person to give ASIC information, the registered person must give ASIC that information.

Civil penalty: 2,000 penalty units.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC information under subitem (2); and

(b) the person engages in conduct; and

Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.

Strict liability offence

(4) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC information under subitem (2); and

(b) the person engages in conduct; and

Criminal penalty: 10 penalty units.

(5) Subitem (4) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code .

19 Obligation to provide ASIC with assistance if reasonably requested

Requirement to provide assistance

(1) If ASIC, or a person authorised by ASIC, reasonably requests assistance from a registered person in relation to whether the registered person and its representatives are complying with the credit legislation, the registered person must give ASIC or the authorised person the requested assistance.

Civil penalty: 2,000 penalty units.

(2) If the request is in writing, it is not a legislative instrument.

Offence

(3) A person commits an offence if:

(a) the person is subject to a requirement to give ASIC or an authorised person assistance under subitem (1); and

(b) the person engages in conduct; and

Criminal penalty: 25 penalty units, or 6 months imprisonment, or both.

Assistance may include showing ASIC credit books etc.

(4) The assistance referred to in subitem (1) may include showing ASIC the person's credit books or giving ASIC other information.

Division 4--When registrations can be suspended, cancelled or varied

20 Cancellation because of grant or refusal of licence

If:

(a) a person is registered; and

(b) the person applies for a licence under section 36 of the National Credit Act; and

then the person's registration is cancelled.

Note: See subitem 29(2) for when the cancellation comes into force.

21 Cancellation of all registrations on transition end day

The registration of every registered person is cancelled at the end of the transition end day.

22 Suspension or cancellation for failure to apply for a licence when directed by ASIC

(1) ASIC may give a written notice to a registered person, directing the person to apply for a licence by a day specified in the notice (which must be at least 28 days after the day the notice is given). ASIC may extend the day by giving a written notice to the person.

(2) If the person does not apply for the licence in accordance with section 36 of the National Credit Act by the day specified in the notice, ASIC may suspend or cancel the person's registration.

(3) A notice given under subitem (1) is not a legislative instrument.

23 Suspension or cancellation without hearing

(1) ASIC may suspend or cancel a registered person's registration if:

(a) the registered person lodges with ASIC an application for the suspension or cancellation; or

(b) the registered person does not engage, or ceases to engage, in credit activities; or

(c) a banning order or disqualification order under Part 2‑4 of the National Credit Act is in force against the registered person; or

(d) a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is in force against the registered person; or

(e) the registered person is banned from engaging in a credit activity under a law of a State or Territory; or

(f) an Australian financial services licence of the registered person is suspended, or has been cancelled within the last 7 years, under:

(i) paragraph 915B(1)(d) or subparagraph 915B(4)(b)(iii) of the Corporations Act 2001 (which deals with suspension or cancellation because of mental or physical incapacity); or

(ii) section 915C of the Corporations Act 2001 (which deals with suspension or cancellation after offering a hearing); or

(g) if the registered person is not the trustees of a trust--the registered person is insolvent; or

(h) the registered person is a single natural person and:

(i) is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001 ; or

(ii) is convicted of serious fraud; or

(iii) is incapable of managing his or her affairs because of physical or mental incapacity; or

(iv) a prescribed State or Territory order is in force against the registered person; or

(i) the registered person is not a single natural person and a prescribed State or Territory order is in force against any of the following persons:

(i) if the registered person is a body corporate--a director or secretary of the body corporate who performs duties in relation to credit activities;

(ii) if the registered person is a partnership or the trustees of a trust--a partner or trustee who performs duties in relation to credit activities.

(1A) For the purposes of paragraph (1)(e), a reference to a credit activity in the definitions of banned from engaging in a credit activity under a law of a State or Territory and State or Territory credit licence in subsection 5(1) of the National Credit Act (as those definitions apply for the purposes of this Act because of subsection 4(2) of this Act) includes a reference to an activity that would be a credit activity if the new Credit Code had applied from the day section 3 of the National Credit Act commences.

(2) An application for suspension or cancellation of a registration must be in the approved form.

24 Suspension or cancellation after offering a hearing

(1) ASIC may suspend or cancel a registered person's registration (subject to complying with subitem (3)) if:

(a) the registered person has contravened an obligation under item 16 (which deals with general conduct obligations of registered persons); or

(b) ASIC has reason to believe that the registered person is likely to contravene an obligation under that item; or

(i) was false in a material particular or materially misleading; or

(ii) omitted a material matter; or

(d) if the registered person is not a single natural person--any of the matters set out in subitem (2) applies to any of the following persons:

(i) if the registered person is a body corporate--a director or secretary of the body corporate who performs duties in relation to credit activities;

(ii) if the registered person is a partnership or the trustees of a trust--a partner or trustee who performs duties in relation to credit activities.

(2) For the purposes of paragraph (1)(d), the matters are the following:

(a) a banning order or disqualification order under Part 2‑4 of the National Credit Act is in force against the person;

(b) a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is in force against the person;

(d) an Australian financial services licence of the person is suspended, or has been cancelled within the last 7 years, under:

(i) paragraph 915B(1)(d) or subparagraph 915B(4)(b)(iii) of the Corporations Act 2001 (which deals with suspension or cancellation because of mental or physical incapacity); or

(ii) section 915C of the Corporations Act 2001 (which deals with suspension or cancellation after offering a hearing);

(e) the person is insolvent;

(f) the person is disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001 ;

(g) the person is convicted of serious fraud;

(h) the person is incapable of managing his or her affairs because of physical or mental incapacity.

(3) ASIC may only suspend or cancel a person's registration under this item after giving the person an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; and

(b) to make submissions to ASIC on the matter.

25 Suspension and cancellation--special procedures for APRA‑regulated bodies

Special procedures for APRA‑regulated bodies (other than ADIs)

(1) If a registered person, or a related body corporate, is a body (the APRA body ) regulated by APRA (other than an ADI), then the following provisions apply:

(a) ASIC cannot suspend or cancel the registered person's registration if doing so would, in ASIC's opinion, have the result of preventing the APRA body from being able to carry on all or any of its usual activities (being activities in relation to which APRA has regulatory or supervisory responsibilities), unless ASIC has first consulted APRA about the proposed action;

(b) if ASIC suspends or cancels the registered person's registration and paragraph (a) does not apply to that action, ASIC must, within one week, inform APRA of the action that has been taken.

Special procedures for ADIs

(2) If:

(a) a registered person is an ADI; or

(b) a related body corporate of a registered person is an ADI, and cancellation or suspension of the registered person's registration would, in ASIC's opinion, have the result of preventing the ADI from being able to carry on all or any of its banking business (within the meaning of the Banking Act 1959 );

then the following provisions have effect:

(c) subject to paragraph (d), the powers that ASIC would otherwise have under this Division to cancel or suspend the registered person's registration, or to revoke a suspension to which this subitem applied, are instead powers of the Minister;

(d) the procedures for the exercise of a power to which paragraph (c) applies are the same as would apply if ASIC could exercise the power, except that the Minister must not exercise the power unless he or she has first considered advice from ASIC on the proposed action, being advice given after ASIC has consulted APRA about the proposed action;

(e) ASIC (rather than the Minister) must still conduct any hearing required under paragraph 24(3)(a) and receive any submissions under paragraph 24(3)(b).

26 Varying registrations

ASIC may vary a person's registration to take account of a change in the person's name.

Note: The conditions on the registration can be varied under item 14.

27 Effect of suspension

(1) A suspended registration has no effect while it remains suspended.

(2) Subitem (1) has effect subject to item 31 (which deals with the continued effect of some suspended or cancelled registrations).

28 Revocation of suspension

ASIC may at any time revoke the suspension of a person's registration.

29 Date of effect, notice and publication of variation, cancellation or suspension etc.

(1) ASIC must give a registered person written notice of a variation, suspension, revocation of a suspension, or cancellation of the person's registration.

(2) A variation, suspension, revocation of a suspension, or cancellation of a person's registration (other than a cancellation under item 21) comes into force when the notice is given to the person.

(3) As soon as practicable after the notice is given to the person, ASIC must publish a notice of the action on ASIC's website. The notice must state when the variation, suspension, revocation of a suspension, or cancellation of the person's registration came into force.

30 Statement of reasons

A notice of suspension or cancellation given to a registered person must be accompanied by a statement of reasons for the action taken.

31 ASIC may allow registration to continue in force

(1) If ASIC gives a written notice of suspension or cancellation to a registered person, ASIC may include in the notice terms specifying that the registration continues in force as though the suspension or cancellation had not happened for the purposes of specified provisions of this Schedule in relation to specified matters, a specified period, or both.

(2) If ASIC includes terms in a notice under subitem (1), the registration continues in force in accordance with the terms of the notice.

Part 4 -- Application of other provisions of the National Credit Act in relation to registered persons and this Schedule

32 Application of this Part

This Part (other than items 32A, 36 and 39) applies during the period that:

(a) starts at commencement; and

(b) ends on the transition end day.

32A Application of sections 64 and 65 of the National Credit Act before commencement

(1) This item applies during the period that:

(a) starts at the same time as the start of the period referred to in subitem 11(2); and

(b) ends immediately before commencement.

(2) Sections 64 and 65 (which deal with the authorisation of credit representatives) of the National Credit Act apply during the period as if:

(a) all references to a licensee were references to a registered person; and

(b) all references to a licensee's licence were references to a registered person's registration.

(3) An authorisation of a credit representative that is given under section 64 or 65 of the National Credit Act (as those sections apply because of subitem (2)) during the period is taken not to be given until commencement.

(4) Despite subitem (3), a body corporate that has been authorised as a credit representative under subsection 64(1) of the National Credit Act (as it applies because of subitem (2)) during the period may authorise natural persons as credit representatives under subsection 65(1) of the National Credit Act (as it applies because of subitem (2)) during the period.

33 Application of Part 2‑3 of the National Credit Act

Application of Part 2‑3 of National Credit Act

(1) Part 2‑3 (which deals with credit representatives and other representatives of licensees) of the National Credit Act applies as if:

(a) all references to a licensee were references to a registered person or licensee; and

(b) all references to licensees were references to registered persons or licensees; and

(c) all references to a licensee's licence were references to a registered person's registration or licensee's licence; and

(d) the reference in subsection 67(1) of the National Credit Act to a person holding a licence authorising the person to engage in the credit activity were a reference to a person holding a licence authorising the person to engage in the credit activity, or being registered to engage in the credit activity.

Credit representatives of registered person taken to be credit representatives of licensee

(2) If:

(a) a credit representative of a registered person has been authorised under subsection 64(1) or 65(1) of the National Credit Act (as those subsections apply because of subitem (1) or item 32A); and

(b) the registered person is granted a licence under the National Credit Act; and

then the authorisation of the credit representative under subsection 64(1) or 65(1) of the National Credit Act (as those subsections apply because of subitem (1) or item 32A) is taken to have been an authorisation of the credit representative as a credit representative of the licensee under subsection 64(1) or 65(1) of the National Credit Act (as those subsections apply otherwise than because of subitem (1) or item 32A).

34 Application of Part 2‑4 of the National Credit Act

Part 2‑4 (which deals with banning and disqualification of persons from engaging in credit activities) of the National Credit Act applies as if:

(a) the references in paragraph 80(1)(a) and (5)(a) of the National Credit Act to a licence were references to a registration or licence; and

(b) the reference in paragraph 80(5)(b) of the National Credit Act to section 54 of the National Credit Act were a reference to section 54 of the National Credit Act or item 23 of this Schedule; and

(c) the reference in paragraph 86(1)(a) of the National Credit Act to a licence were a reference to a registration or licence.

35 Application of Divisions 2 and 4 of Part 2‑5 of the National Credit Act

(1) Division 2 of Part 2‑5 (which deals with financial records of licensees) of the National Credit Act applies as if all references to a licensee were references to a registered person or licensee.

(2) Division 4 of Part 2‑5 (which deals with matters relating to audit reports) of the National Credit Act applies as if:

(a) all references to a licensee were references to a registered person or a licensee; and

(b) the reference in paragraph 102(1)(a) of the National Credit Act to an audit report required under subsection 49(3) of the National Credit Act in relation to a licensee were a reference to an audit report required under subsection 49(3) of that Act in relation to a licensee, or an audit report required under subitem 17(3) of this Schedule in relation to a registered person; and

(c) the reference in paragraph 106(a) of the National Credit Act to audit reports referred to in subsection 102(1) of the National Credit Act included a reference to the audit reports required under subitem 17(3) of this Schedule.

36 Application of Chapter 3 of the National Credit Act

When all of Chapter 3 (responsible lending conduct) applies to all registered persons

(1) Chapter 3 (which deals with responsible lending conduct) of the National Credit Act applies during the period that:

(a) starts on the Chapter 3 start day; and

(b) ends on the transition end day;

as if:

(d) all references to licensees were references to registered persons or licensees.

Note: The Chapter 3 start day is 1 January 2011 (or later prescribed day). That day is when Chapter 3 of the National Credit Act starts to apply. However, under subitem (2) of this item, certain provisions of Chapter 3 apply before then to some registered persons.

When certain provisions of Chapter 3 apply earlier for some registered persons

(2) Despite subitem (1), sections 112, 115, 116, 117, 118, 119, 122, 123, 124, 128, 129, 130, 131, 133, 135, 138, 139, 140, 141, 142, 145, 146, 147, 151, 152, 153, 154, 156, 162, 163 and 164 (which deal with the main responsible lending conduct rules) of the National Credit Act apply, in relation to a registered person who is neither an ADI nor a registrable corporation, during the period referred to in subitem 19(2) of Schedule 1 as if:

(a) all references to a licensee were references to a registered person or licensee; and

(b) all references to licensees were references to registered persons or licensees.

Note: The period referred to in subitem 19(2) of Schedule 1 starts on commencement and ends immediately before the Chapter 3 start day.

Some provisions of Chapter 3 never apply to registered persons

(3) Despite subitem (1), the following provisions of Chapter 3 of the National Credit Act do not apply in relation to registered persons:

(a) paragraphs 113(2)(d), 126(2)(d), 127(2)(d), 136(2)(d), 149(2)(d), 150(2)(d) and 160(3)(d) (which deal with including Australian credit licence numbers in credit guides);

(b) subparagraphs 113(2)(h)(i), 126(2)(e)(i), 127(2)(e)(i), 136(2)(h)(i), 149(2)(e)(i), 150(2)(e)(i) and 160(3)(f)(i) (which deal with including information about internal dispute resolution procedures in credit guides).

Application of Chapter 3 in relation to contracts or other instruments

(4) Despite subitem 20(1) of Schedule 1, sections 120, 132, 143 and 155 of the National Credit Act do not apply in relation to a contract or other instrument that was made before the Chapter 3 start day.

Note: Subitem 20(1) of Schedule 1 provides that this Schedule applies in relation to contracts or other instruments made after commencement. However, sections 120, 132, 143 and 155 of the National Credit Act, which apply in relation to registered persons because of subitem (1) of this item, do not apply in relation to contracts or other instruments made before the Chapter 3 start day.

(5) This item is subject to subitem 20(2) of Schedule 1 (which deals with regulations that provide for the application of this Schedule in relation to contracts or other instruments made before commencement).

37 Application of Chapter 4 of the National Credit Act

(1) Chapter 4 (which deals with remedies) of the National Credit Act applies as if:

(a) all references to "this Act" were references to "this Act and Schedule 2 to the Transitional Act"; and

(b) all references to civil penalty provisions included references to civil penalty provisions within the meaning of this Act.

(2) Section 180 (which deals with orders in relation to unlawful credit activities) of the National Credit Act applies as if the reference in paragraph 180(1)(b) to contravening section 29 of that Act were a reference to contravening section 29 of that Act or item 4 or 6 of this Schedule.

38 Application of Chapter 5 of the National Credit Act

(1) Chapter 5 (which deals with administration) of the National Credit Act applies as if all references to "this Act" were references to "this Act and Schedule 2 to the Transitional Act".

(2) Section 243 (which deals with qualified privilege for information given to ASIC) of the National Credit Act applies as if:

(a) the reference in subparagraph 243(1)(c)(i) to section 37 of the National Credit Act were a reference to section 37 of that Act or item 12 of this Schedule; and

(b) the reference in subparagraph 243(1)(c)(ii) to section 54 or 55 of the National Credit Act were a reference to section 54 or 55 of that Act, or item 23 or 24 of this Schedule.

39 Application of Chapter 7 of the National Credit Act

(1) Chapter 7 (which deals with miscellaneous matters) of the National Credit Act, other than sections 327, 329 and 331, applies during the period that:

(a) starts on the day section 3 of the National Credit Act commences; and

(b) ends on the transition end day;

as if all references to "this Act" were references to "this Act and Schedule 2 to the Transitional Act".

(2) Section 327 of the National Credit Act applies to a decision made by ASIC under this Schedule (other than subitem 41(3)) that is made during the period referred to in subitem (1) of this item in the same way as it applies to a decision made by ASIC under the National Credit Act on or after commencement.

Part 5 -- Exemptions and modifications relating to this Schedule

40 Provisions to which this Part applies

The provisions to which this Part applies are:

(a) Divisions 1 and 2 of Part 2 (which deal with requirements to be registered etc. to engage in credit activities); and

(b) Part 3 (which deals with the registration of persons to engage in credit activities); and

(c) definitions in this Act and the National Credit Act, as they apply to references in the provisions referred to in paragraphs (a) and (b); and

(d) instruments made for the purposes of any of the provisions referred to in paragraphs (a) to (c).

41 Exemptions and modifications by ASIC

Exemptions and modifications

(1) ASIC may:

(a) exempt:

(i) a person; or

(ii) a person and all of the person's credit representatives;

from all or specified provisions to which this Part applies; or

(b) exempt a credit activity that is engaged in relation to a specified credit contract, mortgage, guarantee or consumer lease from all or specified provisions to which this Part applies; or

(c) declare that provisions to which this Part applies apply in relation to a person, or a credit activity referred to in paragraph (1)(b), as if specified provisions were omitted, modified or varied as specified in the declaration.

(2) An exemption or declaration under subitem (1) is not a legislative instrument.

(3) ASIC may, by legislative instrument:

(a) exempt a class of persons from all or specified provisions to which this Part applies; or

(b) exempt a credit activity (other than a credit activity referred to in paragraph (1)(b)) from all or specified provisions to which this Part applies; or

(d) declare that provisions to which this Part applies apply in relation to a credit activity (other than a credit activity referred to in paragraph (1)(b)), or a class of persons or credit activities, as if specified provisions were omitted, modified or varied as specified in the declaration.

Conditions on exemptions

(4) An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The court may order the person to comply with the condition in a specified way. Only ASIC may apply to the court for the order.

Publication of exemptions and declarations

(5) An exemption or declaration under subitem (1) must be in writing and ASIC must publish notice of it on its website.

Special rules in relation to offences

(6) If conduct of a person would not have constituted an offence if a particular declaration under paragraph (1)(c) or (3)(d) had not been made, that conduct does not constitute an offence unless, before the conduct occurred:

(a) the text of the declaration was published by ASIC on its website; or

(b) ASIC gave written notice setting out the text of the declaration to the person;

(in addition to complying with the requirements of the Legislative Instruments Act 2003 if the declaration is made under subitem (3)).

(7) In a prosecution for an offence to which subitem (6) applies, the prosecution must prove that paragraph (6)(a) or (b) was complied with before the conduct occurred.

42 Exemptions and modifications by the regulations

The regulations may:

(a) exempt a person or class of persons from all or specified provisions to which this Part applies; or

(b) exempt a credit activity or a class of credit activities from all or specified provisions to which this Part applies; or

(c) provide that the provisions to which this Part applies apply as if specified provisions were omitted, modified or varied as specified in the regulations.

Part 6 -- Regulations relating to infringement notices

43 Regulations--infringement notices

Infringement notices for civil penalties

(1) The regulations may provide for a person who is alleged to have contravened a civil penalty provision in this Schedule to pay a penalty to the Commonwealth as an alternative to civil proceedings.

(2) The penalty must not exceed one‑fourtieth of the maximum penalty that a court could impose on the person for contravention of that provision.

Infringement notices for offences

(3) The regulations may provide for a person who is alleged to have committed an offence against this Schedule that is stated to be an offence of strict liability to pay a penalty to the Commonwealth as an alternative to prosecution.

(4) The penalty must not exceed one‑fifth of the maximum penalty that a court could impose on the person for that offence.

AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback