A taskforce headed by the Australian Securities and Investments Commission (ASIC) has suggested a new self-reporting regime for credit licensees, which is equivalent to the current compliance structure found in the financial services industry.
In a new positions paper entitled, Self-reporting of contraventions by financial services and credit licensees
, the ASIC Enforcement Review Taskforce adopted a “preliminary view” that this self-reporting regime be extended to Australian Credit Licence (ACL) holders to help the regulator identify breaches and maintain records of non-compliance.
“ASIC would be informed of compliance issues in a more consistent and timely manner. It will also be provided with information that will enable it to assess the nature of the breach, the adequacy of the credit licensee's response and whether any further regulatory action should be taken against the licensee,” the report said.
As credit licensees are already expected to identify breaches and maintain compliance records, this should not significantly add to the obligations of ACL holders, the regulator added.
The added requirements for ACL holders would be equivalent to those found in Section 912D of the Corporations Act 2001 which states that financial services licensees must lodge a written report with ASIC within 10 days of becoming aware of a breach.
ASIC acknowledged that a high proportion of credit licensees are sole traders or one person companies and suggested than any increased compliance burden could be offset by making the Compliance Certificates easier to complete.
“However, as the Compliance Certificate serves additional purposes, such as providing information upon which a credit licensee's annual fee is calculated, the requirement to lodge a Compliance Certificate should not be removed.”