(c) that a credit activity engaged in by the person or by someone else is exempt from a requirement to hold a licence; or
(d) that, in engaging in a credit activity, the person acts on behalf of another person; or
(e) that conduct, or proposed conduct, of the person is within the authority of a licensee;
if that is not the case.
Civil penalty: 5,000 penalty units.
(2) A person must not hold out or advertise that the person engages or is able to engage in a credit activity if the person would, if the person engaged in the credit activity, contravene section 29 (which deals with the requirement to be licensed).
Civil penalty: 5,000 penalty units.
Offence
(3) A person commits an offence if:
(a) the person is subject to a requirement under subsection (1) or (2); and
(b) the person engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 1 year imprisonment.
31 Prohibition on conducting business with unlicensed persons
Prohibition on conducting business with unlicensed persons
(1) A licensee must not:
(a) engage in a credit activity; and
(b) in the course of engaging in that credit activity, conduct business with another person who is engaging in a credit activity;
if, by engaging in the credit activity, the other person contravenes section 29 (which deals with the requirement to be licensed).
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: 2 years imprisonment.
32 Prohibition on charging a fee etc.
Prohibition on charging a fee etc.
(1) A person must not demand, receive or accept any fee, charge or other amount from a consumer for engaging in a credit activity if, by engaging in that credit activity, the person contravenes, or would contravene, section 29 (which deals with the requirement to be licensed).
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: 1 year imprisonment.
Part 2‑2—Australian credit licences
Division 1—Introduction
34 Guide to this Part
This Part is about Australian credit licences.
Division 2 explains what an Australian credit licence is and the credit activities that are authorised by it.
Division 3 is about how to get an Australian credit licence, including how to apply for it and when ASIC may grant or refuse to grant it.
Division 4 is about the conditions that may be imposed on an Australian credit licence.
Division 5 is about conduct obligations of licensees.
Division 6 is about the suspension, cancellation or variation of an Australian credit licence.
Division 2—Australian credit licences
35 Australian credit licences
(1) An Australian credit licence is a licence that authorises the licensee to engage in particular credit activities.
(2) The credit activities that the licensee is authorised to engage in are those credit activities specified in a condition of the licence as the credit activities that the licensee is authorised to engage in.
Division 3—How to get an Australian credit licence
36 Applying for a licence
(1) A person may apply for a licence by lodging an application with ASIC on or after 1 July 2010, or a later day prescribed by the regulations.
(2) The application must be in the approved form.
37 When a licence may be granted—applicants other than ADIs
When ASIC must grant a licence
(1) ASIC must grant a person (other than an ADI) a licence if (and must not grant the person a licence unless):
(a) the person has applied for the licence in accordance with section 36; and
(b) ASIC has no reason to believe that the person is likely to contravene the obligations that will apply under section 47 if the licence is granted; and
(c) the requirement in section 37A (fit and proper person test) is satisfied in relation to the applicant and the licence applied for; and
(e) the person meets any other requirements prescribed by the regulations.
Note: ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).
False, misleading or incomplete information
(2) ASIC must refuse to grant the licence if ASIC is satisfied that:
(a) the application for the licence, or any information, audit report or statement lodged with ASIC in accordance with subsection (4), was false in a material particular or materially misleading; or
(b) there was an omission of a material matter from the application or the information, audit report or statement.
ASIC may request information etc. from applicant
(4) ASIC may give a written notice to a person who has applied for a licence requesting the person to lodge with ASIC, within the time specified in the notice, any of the following:
(a) information specified in the notice in relation to any matters that ASIC may have regard to in deciding whether to grant the licence;
(b) an audit report, prepared by a suitably qualified person specified in the notice, in relation to matters that ASIC may have regard to in deciding whether to grant the licence;
(c) if ASIC proposes to grant the applicant a licence—a statement that either:
(i) informs ASIC of any material changes in any information provided to ASIC in, or in connection with, the application; or
(ii) confirms that there have been no such changes.
(5) To avoid doubt:
(a) a notice under subsection (4), and the information, audit report or statement requested in the notice, may relate to any person mentioned in section 37A in relation to the applicant and the licence applied for; and
(b) subsection (7) applies in relation to such a request even if the applicant is unable to comply with the request.
(6) ASIC may, by written notice to the applicant before the time specified in the notice:
(a) withdraw a request under subsection (4); or
(b) extend the time specified in the notice.
(7) If the applicant does not lodge with ASIC the information, audit report or statement requested by ASIC in a notice under subsection (4) within the specified time, the applicant is taken to have withdrawn the application.
(8) To avoid doubt, section 41 does not apply to an application that is taken to have been withdrawn under subsection (7) of this section.
37A Fit and proper person test
(1) For the purposes of paragraph 37(1)(c), subsection 46A(2) and paragraph 55(1)(c), the requirement in this section is satisfied in relation to a person (the first person) and a licence, or a proposed licence, if ASIC is satisfied that there is no reason to believe any of the following:
(a) that the first person is not a fit and proper person to engage in the credit activities authorised by the licence;
(b) if the first person is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the first person is not a fit and proper person to perform one or more functions as an officer of a person that engages in the credit activities authorised by the licence;
(c) if the first person is a partnership or the multiple trustees of a trust:
(i) that any of the partners or trustees are not fit and proper persons to engage in the credit activities authorised by the licence; or
(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of a person that engages in the credit activities authorised by the licence;
(d) that any person who controls the first person is not a fit and proper person to control a person that engages in the credit activities authorised by the licence;
(e) if a controller mentioned in paragraph (d) is a body corporate—that an officer (within the meaning of the Corporations Act 2001) of the controller is not a fit and proper person to perform one or more functions as an officer of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence;
(f) if a controller mentioned in paragraph (d) is a partnership or the multiple trustees of a trust:
(i) that any of the partners or trustees are not fit and proper persons to control a person that engages in the credit activities authorised by the licence; or
(ii) that any of the senior managers of the partnership or the trust are not fit and proper persons to perform one or more functions as an officer (within the meaning of the Corporations Act 2001) of an entity (as defined by section 64A of that Act) that controls a person that engages in the credit activities authorised by the licence.
(2) In considering whether a person is fit and proper for a purpose mentioned in subsection (1), ASIC must have regard to the matters in section 37B.
37B Fit and proper person test—matters to which ASIC must have regard
(1) ASIC must have regard to the matters set out in subsection (2) (subject to Part VIIC of the Crimes Act 1914) for the purposes of applying any of the following provisions to a person:
(a) a paragraph of subsection 37A(1);
(b) paragraph 80(1)(f).
Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.
(2) The matters are as follows:
(a) whether any of the following of the person has ever been suspended or cancelled:
(i) a licence, or a registration under the Transitional Act;
(ii) an Australian financial services licence;
(b) whether any of the following has ever been made against the person:
(i) a banning order, or a disqualification order under Part 2‑4;
(ii) a banning order, or a disqualification order, under Division 8 of Part 7.6 of the Corporations Act 2001;
(c) if the person is an individual—whether the person has ever been disqualified under the Corporations Act 2001, or any other law of the Commonwealth or of a State or Territory, from managing corporations;
(d) whether the person has ever been banned from engaging in a credit activity under a law of a State or Territory;
(e) whether the person has ever been linked to a refusal or failure to give effect to a determination made by AFCA (within the meaning of the Corporations Act 2001);
(f) if the person is not the multiple trustees of a trust—whether the person has ever been insolvent;
(g) if the person is the multiple trustees of a trust—whether a trustee of the trust has ever been insolvent;
(h) whether, in the last 10 years, the person has been convicted of an offence;
(i) any relevant information given to ASIC by a State or Territory, or an authority of a State or Territory, in relation to the person;
(j) any other matter prescribed by the regulations;
(k) any other matter ASIC considers relevant.
38 When a licence may be granted—ADIs
If:
(a) an ADI applies under section 36 for a licence; and
(b) the application includes a statement (in accordance with the requirements of the approved form) to the effect that the ADI will, if granted the licence, comply with its obligations as a licensee;
then ASIC must grant the ADI a licence authorising the ADI to engage in credit activities that equate (as closely as possible) to the credit activities in relation to which the application was made.
Note: ASIC must not grant a licence to a person contrary to a banning order or disqualification order, or if a prescribed State or Territory order is in force against the person or certain representatives of the person (see section 40).
39 Regulations may prescribe streamlined process for other applicants
Despite sections 36 and 37, the regulations may provide that:
(a) some or all of sections 36 and 37 do not apply in relation to particular classes of applicants; and
(b) alternative processes apply to applications for licences by, and the grant of licences to, those classes of applicants.
40 Licences must not be granted to certain applicants
Banning or disqualification order in force against person
(1) Despite subsection 37(1) and section 38, ASIC must not grant a licence that authorises a person to engage in a credit activity if a banning order or disqualification order under Part 2‑4 is in force against the person in relation to that credit activity.
Prescribed State or Territory order in force against person etc.
(2) Despite subsection 37(1) and section 38, ASIC must not grant a licence to a person if:
(a) the person is a natural person against whom a prescribed State or Territory order is in force; or
(b) the person is a body corporate, and a prescribed State or Territory order is in force against a director, secretary or senior manager of the body corporate who would perform duties in relation to the credit activities to be authorised by the licence; or
(c) the person is a partnership or the trustees of a trust, and a prescribed State or Territory order is in force against a partner or trustee who would perform duties in relation to the credit activities to be authorised by the licence.
41 Applicant must be given hearing before refusal of licence
ASIC may only refuse to grant a licence after giving the person who applied for the licence 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 refusal.
42 Notice of grant or refusal of licence and date of effect
(1) ASIC must give a person (the applicant) who has applied for a licence written notice of:
(a) ASIC’s decision on the application; and
(b) if the decision is to grant the applicant a licence—the day on which the licence takes effect; and
(c) if the decision is not to grant the applicant a licence—the reasons for the decision.
(2) The licence comes into force on the day specified in the notice, which must not be before the day on which the decision to grant the licence was made.
43 Australian credit licence numbers
(1) ASIC must allocate each licence a unique Australian credit licence number when it is granted.
(2) If:
(a) a person is granted a licence; and
(b) the person holds an Australian financial services licence;
then the Australian credit licence number that ASIC gives to the licence held by that person must be the same number as the person’s Australian financial services licence number.
(3) ASIC must give the licensee written notice of the Australian credit licence number.
44 Basis on which licence is granted
A licence granted under this Division is granted on the basis that:
(a) conditions on the licence may be imposed, varied or revoked under section 45 or 46; and
(b) the licence may be suspended under section 54, 55 or 56; and
(c) the licence may be cancelled under section 54, 55 or 56; and
(d) the licence may be varied under section 57; and
(e) the licence may be cancelled, revoked, terminated or varied by or under later legislation; and
(f) no compensation is payable if:
(i) conditions on the licence are imposed, varied or revoked as referred to in paragraph (a); or
(ii) the licence is suspended, cancelled, varied, revoked or terminated as referred to in paragraphs (b) to (e).
Division 4—Conditions on an Australian credit licence
45 The conditions on the licence
ASIC may impose, vary or revoke conditions on licences
(1) Subject to section 46A, ASIC may, at any time:
(a) impose conditions, or additional conditions, on a licence; and
(b) vary or revoke conditions imposed on a licence.
(2) ASIC may do so:
(a) on its own initiative; or
(b) if the licensee 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 licensee 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 licensee a hearing
(5) Despite subsection (1), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the licence after giving the licensee 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 subsection does not apply to ASIC imposing conditions when the licence is granted, or imposing or varying conditions in accordance with an application under paragraph (2)(b).
Condition in relation to credit activities authorised
(6) ASIC must ensure that the licence is subject to a condition that specifies the credit activities or classes of credit activities that the licensee is authorised to engage in.
Regulations may prescribe conditions
(7) The licence is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.
46 Licence conditions—special procedures for APRA‑regulated bodies
Special procedures for APRA‑regulated bodies (other than ADIs)
(1) If the licensee, or a related body corporate, is a body (the APRA body) regulated by APRA (other than an ADI), then the following provisions apply: