Requirement in relation to payment of money from trust account
(3) The credit service licensee must pay any money withdrawn from the trust account to the person or persons lawfully entitled to receive that money.
Civil penalty: 5,000 penalty units.
Offence
(4) The credit service licensee commits an offence if:
(a) the credit service licensee is subject to a requirement under subsection (1), (2) or (3); and
(b) the credit service licensee engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 6 months imprisonment.
Trust account money not available for payment of debts etc.
(5) Money paid into a trust account by the credit service licensee under this section:
(a) is not available for the payment of a debt of any other creditor of the credit service licensee; and
(b) is not liable to be attached or taken in execution under the order or process of a court at the instance of any such creditors.
100 Obligation to lodge trust account statement and trust account audit report
Requirement to prepare and lodge trust account statement
(1) The credit service licensee must, for each financial year of the credit service licensee:
(a) prepare a written statement in relation to the trust account (the trust account statement) in accordance with this section; and
(b) lodge the trust account statement with ASIC in accordance with this section.
Civil penalty: 5,000 penalty units.
Requirement to prepare and lodge trust account audit report
(2) The credit service licensee must, with the trust account statement, lodge with ASIC an auditor’s report (the trust account audit report) in accordance with this section.
Civil penalty: 5,000 penalty units.
Requirements for statement and audit report
(3) Each of the trust account statement and trust account audit report must:
(a) be in the approved form; and
(b) contain the information and matters prescribed by the regulations; and
(c) be lodged with ASIC in accordance with section 101.
(4) The trust account audit report must be prepared by a person who complies with any eligibility requirements prescribed by the regulations.
Offence
(5) The credit service licensee commits an offence if:
(a) the credit service licensee is subject to a requirement under subsection (1) or (2); and
(b) the credit service licensee engages in conduct; and
(c) the conduct contravenes the requirement.
Criminal penalty: 5 years imprisonment.
Meaning of financial year
(6) A financial year of the credit service licensee means:
(a) if the credit service licensee is a body corporate to which section 323D of the Corporations Act 2001 applies—a financial year of the body corporate (within the meaning of that section); and
(b) in any other case—a year ending on 30 June.
101 Time of lodgment of trust account statement and trust account audit report
(1) Unless an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the day that is 3 months after the end of the financial year of the credit service licensee to which they relate.
(2) If an extension is granted under subsection (3), the trust account statement and trust account audit report must be lodged with ASIC before the end of the extended period.
(3) ASIC may, on application made:
(a) by the credit service licensee and the auditor that is to prepare the trust account audit report; and
(b) before the end of the period that would otherwise apply;
approve an extension of the period for lodging the trust account statement and trust account audit report. The extension may be of the period originally applicable or the period applicable under a previous extension.
(4) An approval may be given subject to any conditions imposed by ASIC.
(5) If an approval is given subject to conditions, the licensee must comply with those conditions.
Division 4—Matters relating to audit reports
102 Auditor’s right of access to records, information etc.
Auditor is entitled to access and assistance etc. from licensee
(1) An auditor (the auditor) who prepares one of the following audit reports (the audit report):
(a) an audit report required under subsection 49(3) in relation to a licensee;
(b) a trust account audit report required under subsection 100(2) in relation to a licensee;
has a right of access at all reasonable times to the financial records or other credit books of the licensee for purposes relating to the audit report.
(2) The auditor is entitled to require:
(a) from the licensee; or
(b) if the licensee is a body corporate—from any director, secretary or senior manager of the licensee;
any assistance and explanations that the auditor desires for purposes relating to the audit report.
Requirement to give auditor access and assistance etc.
(3) The licensee, or a director, secretary or senior manager of the licensee if it is a body corporate, must not:
(a) refuse or fail to allow the auditor access, in accordance with subsection (1), to financial records or other credit books of the licensee; or
(b) refuse or fail to give assistance, or an explanation, to the auditor as and when required under subsection (2); or
(c) otherwise hinder, obstruct or delay the auditor in the performance or exercise of the auditor’s duties or powers.
Civil penalty: 5,000 penalty units.
Offence
(4) A person commits an offence if:
(a) the person is subject to a requirement under subsection (3); and
(b) the person engages in conduct; and
(c) the person’s conduct contravenes the requirement.
Criminal penalty: 2 years imprisonment.
103 Auditor’s fees and expenses
(1) The reasonable fees and expenses of the auditor for preparing the audit report are payable by the licensee.
(2) The auditor may recover those fees by action against the licensee.
104 Auditor to report on certain matters
Requirement for auditor to disclose maters
(1) If the auditor, in the performance of duties relating to the audit report, becomes aware of a matter referred to in subsection (2), the auditor must, within 7 days after becoming aware of the matter:
(a) lodge a written report on the matter with ASIC; and
(b) give a copy of the report to the licensee.
Civil penalty: 5,000 penalty units.
Matters that must be disclosed
(2) A report must be given in relation to any matter that, in the opinion of the auditor:
(a) has adversely affected, is adversely affecting or may adversely affect the ability of the licensee to meet the licensee’s obligations as a licensee; or
(b) constitutes or may constitute a contravention of:
(i) Division 2 or 3 (or regulations made under those Divisions); or
(ii) a condition of the licensee’s licence; or
(c) constitutes an attempt to unduly influence, coerce, manipulate or mislead the auditor in the preparation of the audit report.
Offence
(3) The auditor commits an offence if:
(a) the auditor is subject to a requirement under subsection (1); and
(b) the auditor engages in conduct; and
(c) the auditor’s conduct contravenes the requirement.
Criminal penalty: 1 year imprisonment.
105 Qualified privilege for auditor etc.
Qualified privilege for auditor
(1) The auditor has qualified privilege in relation to:
(a) a statement that the auditor makes, orally or in writing, in the course of its duties relating to the audit report; or
(b) the lodging of a report with ASIC under subsection 104(1); or
(c) the giving of a report to the licensee under subsection 104(1).
Note: If the auditor is a company, the company has qualified privilege under this subsection in relation to statements made, and reports lodged or sent, by natural persons on behalf of the company if those statements and notices can be properly attributed to the company.
Qualified privilege for registered company auditor acting on behalf of company
(2) If the auditor is a company registered under the Corporations Act 2001, a registered company auditor acting on behalf of the company has qualified privilege in relation to:
(a) a statement that the registered company auditor makes (orally or in writing) in the course of the performance, on behalf of the company, of the company’s duties relating to the audit report; or
(b) the lodging by the registered company auditor, on behalf of the company, of a report with ASIC under subsection 104(1); or
(c) the giving by the registered company auditor, on behalf of the company, of a report to the licensee under subsection 104(1).
Qualified privilege for subsequent publication
(3) A person has qualified privilege in relation to the publishing of a document prepared by the auditor in the course of the auditor’s duties relating to the audit report.
(4) A person has qualified privilege in relation to the publishing of a statement:
(a) made by the auditor as referred to in subsection (1); or
(b) made by a registered company auditor as referred to in subsection (2).
106 Regulations in relation to audit reports etc.
The regulations may make provision in relation to:
(a) the audit reports referred to in subsection 102(1); and
(b) audit reports that persons who have applied for a licence may be requested to lodge under subsection 37(4) or 46A(3); and
(c) the auditors that prepare those reports; and
(d) auditing standards that must be complied with in relation to those reports.
Part 2‑6—Exemptions and modifications relating to this Chapter
Division 1—Introduction
107 Guide to this Part
This Part is about exemptions from, and modifications of, the provisions of this Chapter.
Division 2 deals with how exemptions and modifications may be made by ASIC or by the regulations.
Division 2—Exemptions and modifications relating to this Chapter
108 Provisions to which this Part applies
The provisions to which this Part applies are:
(a) this Chapter; and
(b) definitions in this Act, as they apply to references in this Chapter; and
(c) instruments made for the purposes of this Chapter.
109 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 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 subsection (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
(c) exempt a class of credit activities 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 subsection (1) must be in writing and ASIC must publish notice of it on its website.
Special rules in relation to offences
(6) If conduct (including an omission) 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 Legislation Act 2003 if the declaration is made under subsection (3)).
(7) In a prosecution for an offence to which subsection (6) applies, the prosecution must prove that paragraph (6)(a) or (b) was complied with before the conduct occurred.
110 Exemptions and modifications by the regulations
(1) 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.
(2) An exemption that:
(a) is made for the purposes of paragraph (1)(a); and
(b) exempts a person or class of persons from subsection 29(1) to enable testing of particular credit activities;
may apply unconditionally or subject to specified conditions.
(3) 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.
(4) An exemption described in subsection (2) may empower ASIC to make decisions relating to how the exemption starts or ceases to apply to a person or class of persons.
Chapter 3—Responsible lending conduct
Part 3‑1—Licensees that provide credit assistance in relation to credit contracts
Division 1—Introduction
111 Guide to this Part
This Part has rules that apply to licensees that provide credit assistance in relation to credit contracts. These rules are aimed at better informing consumers and preventing them from being in unsuitable credit contracts. However, these rules do not apply to a licensee that will be the credit provider under the credit contract.
Division 2 requires a licensee to give its credit guide to a consumer. The credit guide has information about the licensee and some of the licensee’s obligations under this Act.
Division 3 requires a licensee to give a quote before providing credit assistance to a consumer. The quote must set out the maximum amount the consumer will be required to pay to the licensee. The licensee must not charge more than that amount.
Division 4 requires a licensee, before providing credit assistance to a consumer in relation to a credit contract, to make a preliminary assessment as to whether the contract will be unsuitable for the consumer. To do this, the licensee must make inquiries and verifications about the consumer’s requirements, objectives and financial situation. The licensee must give the consumer a copy of the assessment if requested.
Division 5 requires a licensee, when providing credit assistance to a consumer in relation to a credit contract, to give the consumer a document that discloses certain information (for example, the indirect remuneration the licensee is likely to receive).
Division 6 prohibits a licensee from providing credit assistance to a consumer in relation to a credit contract if the contract will be unsuitable for the consumer.
Division 7 prohibits a licensee from providing credit assistance to a consumer in relation to short‑term credit contracts, and imposes requirements on a licensee who makes representations about providing credit assistance in relation to small amount credit contracts. It also imposes requirements in relation to recording the preliminary assessment that a small amount credit contract is not unsuitable.
112 Application of this Part
This Part does not apply in relation to credit assistance provided by a licensee in relation to a credit contract if the licensee is or will be the credit provider under the contract.
Division 2—Credit guide of credit assistance providers
113 Credit guide of credit assistance providers
Requirement to give credit guide
(1) A licensee must, as soon as practicable after it becomes apparent to the licensee that it is likely to provide credit assistance to a consumer in relation to a credit contract, give the consumer the licensee’s credit guide in accordance with subsection (2).
Civil penalty: 5,000 penalty units.
(2) The licensee’s credit guide must:
(a) be in writing; and
(b) be in the form (if any) prescribed by the regulations; and
(c) specify the licensee’s name and contact details; and
(d) specify the licensee’s Australian credit licence number; and
(e) give information about:
(i) any fees that are payable by a consumer to the licensee for the licensee’s credit assistance; and
(ii) any charges that are payable by a consumer to the licensee for matters associated with providing the credit assistance; and
(iii) the method for working out the amount of the fees and charges; and
(f) give information about:
(i) if there are 6 or fewer credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of those credit providers; and
(ii) if there are more than 6 credit providers that the licensee conducts business with when providing credit assistance in relation to credit contracts—the names of the 6 credit providers with whom the licensee reasonably believes it conducts the most business; and