ASIC enshrines independence definition

by Ben Abbott13 Mar 2012

ASIC has further ensconced its new definition of 'independent' brokers in credit licence application guidance.

In updated guidance released last week (RG 204), Applying for and varying a credit licence, ASIC has again defined brokers as 'independent', despite this being off-limits for brokers in advertising.

The document defines 'independent home loan credit assistance' as that assistance relating to credit, secured by real property, where neither the licensee nor its representatives will be the credit provider.

However, under NCCP brokers are unable to describe themselves as 'independent', 'impartial' or 'unbiased in any of their representations to clients, largely due to commission payments.

ASIC told Australian Broker it had reached this new  definition for a specific purpose.

“Independent credit assistance is defined in RG 206 for the purposes of RG 206 and in order to make a distinction with credit assistance provided by employees and representatives of lenders solely in relation to that lender's own loans,” the ASIC spokesperson told Australian Broker. “This was done after a public consultation process on the issue of appropriate training standards for such credit advisers.

ASIC previously said that it would change the term if there is evidence of market confusion.

“ASIC is comfortable with the use of the term but if there was evidence of real confusion ASIC would consider providing further explanation in RG 206 or adopting another term.”

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