Frequently Asked Questions
Do I need a Credit Licence?
If you engage in credit activities you will need an Australian Credit Licence or authorisation from a credit licensee (become a Credit Representative) to conduct business.
What are the benefits of becoming a Credit Licensee?
- Being your own boss. A Licensee has obligations and if the Licensee appoints a Credit Representative (CR), it's the Licensee's prerogative, quite rightly, to tell their Credit Reps how to meet the obligations. So as a Credit Rep, you get told what your business methods will be. There are many ways to comply with the NCCP obligations. As a Licensee you get the control and the choice as to how you're going to comply.
- Many of the obligations of a Licensee (some of which are not obligations of a Credit Rep), are simply good business practice. So if you have an obligations that is forcing you to do something which is good for your business, we think that's a good thing.
- Many brokers that are Credit Reps, are Reps under their aggregator's Licence and are therefore somewhat tied to the aggregators. Having your own licence puts you one step closer to the freedom of being to move if you choose.
How do I get a Credit Licence?
Regulatory Guide 204 (RG 204) details the documents required and the process for obtaining a Credit Licence. You first need to understand your obligations and how you conduct your business. Regulatory Guides can be difficult to understand and there is no checklist. QED Risk Services can advise you of everything required and the best course of action. Read More: link.
Once the documentation is prepared and the online application is submitted, ASIC may require further explanation. QED Risk Services specialises in dealing with ASIC as we have applied and successfully obtained over 400 licences so far for our clients. There is isn't anything that ASIC have asked for that we haven't seen before.
What do I need to get a Credit Licence?
The two main requirements for a Credit Licence to determine whether you are eligible are your experience and qualifications.
The Responsible Manager on the credit licence must have a minimum of two years' experience in the NCCP regulated environment, since 1 July 2010.
If you are applying for a Credit Licence with the authorisation of 'other than a provider of credit', you must have a minimum of two years broking experience.
Therefore if you are applying for a Credit Licence with the authorisation of 'provider of credit', you must have at least two years' experience as a Lender or making lending decisions.
Each Responsible Manager will also require at least a relevant Cert IV qualification of some kind.
If you are uncertain of your experience and qualifications, please call us on 1300 817 662. We are happy to help.
The other documents required (apart from your NCCP policy and procedure documentation to meet the Licence General Conduct Obligations are Criminal History Check and Bankruptcy Check for each Responsible Manager.
How long does it take to get a Credit Licence?
Once your license application has been lodged with ASIC, they claim to have a 60 day turnaround. Unfortunately as at August 2017 they are rarely able to meet this standard and can often take longer than this. QED strongly advises that brokers plan to have at least a 6 month period before receiving their license, and to arrange for a fully compliant application as soon as possible.
When QED Risk Services prepares documentation and lodges your application with ASIC, we can tell you when it is given to an analyst. After lodging and managing over 500 Credit Licenses, we know all the analysts and can give you more of an idea. At QED Risk Services, we are in regular contact with ASIC to check on our clients' applications, and fight for their Credit Licenses to be approved.