ASIC emphasises transitional period for qualifications ends on 30 June 2014

ASIC, in a Credit Reform Update (Issue 37), 14 April 2014 reminds credit licensees and responsible managers that the transitional period for them to acquire the necessary qualification ends on 30 June 2014.

From 1 July 2014, responsible managers of each credit licensee must meet the minimum qualification requirements in addition to the minimum amount of problem-free experience. ASIC makes it clear that the requirements apply to responsible managers of existing licensees even if they were granted a licence on the basis of industry experience, instead of meeting minimum qualification requirements.

The competency and training requirements for credit licensees and responsible managers are set out in Regulatory Guide 206.

Below are excerpts from Regulatory Guide 206, highlighting the soon to end transitional arrangements and the ongoing requirements to qualify and continue professional development.

Transitional arrangements

Your responsible managers must comply fully with the qualification requirements in Section B (see RG 206.50–RG 206.54) by 30 June 2014. Until then, we will also accept:

1. responsible managers of lenders who can demonstrate five years relevant problem-free experience and
2. responsible managers of businesses providing credit assistance who can demonstrate two years relevant problem-free experience.

We will accept this experience even if the responsible managers do not have the Certificate IV level credit industry-specific qualifications or general relevant higher level qualifications outlined in Section B. As a transitional arrangement, representatives who provide third-party home loan credit assistance will have until 30 June 2014 to obtain a Certificate IV in Finance and Mortgage Broking.

Summary of ASIC’s organisational competence and representative training requirements

We have summarised our organisational competence and representative training requirements in Table 1.

Table 1: Our organisational competence and representative training requirements
            

Who you are		What you must do
		Initial requirements	Ongoing requirements
Responsible managers
A responsible manager of a business that provides third-party home loan credit assistance*		Responsible managers must have completed at least a Certificate IV in Finance and Mortgage Broking.	At least 20 hours of CPD each year.
A responsible manager of a business that only provides home loan credit assistance in relation to the licensee’s own credit products		Responsible managers must have completed: a credit industry qualification to at least the Certificate IV level; or another general higher level qualification (e.g. a diploma or university degree) in a relevant discipline.	At least 20 hours of CPD each year.
All other responsible managers		Responsible managers must have completed: a credit industry qualification to at least the Certificate IV level; or Ÿ another general higher level qualification (e.g. a diploma or university degree) in a relevant discipline.	At least 20 hours of CPD each year.
Representatives
A representative providing third-party home loan credit assistance.1		Representatives must complete a Certificate IV in Finance and Mortgage Broking.	At least 20 hours of CPD each year.
A representative only providing home loan credit assistance in relation to their licensee’s own credit products	Representatives must complete training as determined by the licensee that will: allow the representative to apply the knowledge specified in Table 2 in Section C; and cover all other areas appropriate to the representative’s role.			A choice of: a minimum 20 hours of CPD each year; or a regular knowledge update review and sufficient hours of CPD each year to enable completion of the knowledge update review.
All other representatives	Representatives must complete training as determined by the licensee, and as appropriate to the representative’s role and industry sector.			Between 10 and 30 hours of CPD each year.2

 

Each credit licensee needs to review the qualifications of its responsible managers (and its representatives) to ensure compliance and also review the requirements for ongoing training to ensure that ASIC requirements are being met.

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