Displaying ACLs - new rules from 1 April 2012
The requirement to display Australian Credit Licence numbers on National Credit Code and NCCP Act documents commences on 1 April 2012.
INFO103 issued by ASIC states that using the initials ‘ACL’ is not sufficient and the words ‘Australian Credit Licence’ must be used in full; for example ‘Australian credit licence 12345’.
What documents must display an ACL?
Section 52 of the NCCP Act specifies that an ACL holder must show its ACL number on prescribed documents. Regulation 13 of the NCCP Regulations prescribes the following documents.
The documents required by Chapter 3 (Credit Guides, Quotes, and Proposal Disclosure Documents). This requirement applies from 1 October 2011:
- printed advertisements that relate to the provision of regulated credit – see further information below.
- documents required to be created, produced, given or published under the Code (eg NCC notices, credit contracts, mortgages, guarantees).
- documents lodged with ASIC that relate to the provision of regulated credit.
This is an important requirement as a breach can incur a civil penalty of $220,000 for individuals (natural persons) or $1.1m for companies.
Special purpose funding entities
There will be cases when a lender of record’s ACL is not shown alongside the name of the lender of record. For example, if the lender of record is unlicensed because it is a COI (Carried Over Instrument) lender or a special purpose funding entity, the lender may not have a licence applicable to the relevant credit contract.
For example, Permanent Custodians and Perpetual Trustees are the lender of record for many securitised programs. Although Permanent and Perpetual do hold an ACL for their other activities, that ACL does not apply to their activities where a CL13 notice has been lodged with ASIC and Permanent and Perpetual are exempt from licensing. (A CL13 notice is a notice filed at ASIC to inform ASIC that a servicer is managing the affairs of an exempt special purpose funding entity). It would be incorrect to show Permanent or Perpetual’s ACL in these circumstances.
There is no definition of ‘advertisement’ in the NCC, but the Concise Oxford English Dictionary defines an advertisement as ‘a public announcement (especially in newspapers, on posters, by television, notice to readers in a book, etc)’.
Drawing on the views of ASIC in RG13, it appears that a website advertising products does not comprise a printed advertisement.
The following will be considered ‘printed advertisements that relate to the provision of regulated credit’:
- ‘boxed out’ advertisement in a newspaper; and
- words or pictures that amount to more than a mere listing in the white pages or yellow pages.
There is no specific requirement for credit representative to show their credit representative number except in Credit Guides – see s 158(2) of the NCCP Act. It is important to note that ‘Credit Representative Number’ must be stated in full. The abbreviation CR is not acceptable.
However, it would be wise for credit representatives to show their CR number on all documents listed above where the licensee’s ACL number must be shown.
Published: Friday, March 16, 2012blog comments powered by Disqus