Brokers to be summoned by ASIC

by Julia Corderoy10 Jun 2016
ASIC has revealed it will be serving notices to brokers to provide data, as a part of its fact find for the mortgage broker remuneration review. However, the FBAA is assuring that brokers should not be worried.

The FBAA’s Peter White, who met with the ASIC team heading up the review in Melbourne yesterday, said the corporate watchdog will be calling on brokers to provide data, following its data collection from lenders and aggregators.  

“What will happen as of next week is notices will be served on the lenders for the data collection. The week after that the notice will be served on the aggregators. Brokers will be last on the list to get notices served on them,” White told Australian Broker

“That will be about two to three weeks away before that happens.”

According to White, ASIC was vague on the specifics of what data they will be seeking, however he told Australian Broker it will be focussed on “drilling down on the borrower profile”.  

White also said one “significant sized” lender – he could not reveal who – told him that there could be as many as three million transactions involved in the fact find.

Some aggregators have already submitted data to ASIC as a part of their cooperation with the review. AFG told brokers at its Masterclass in Sydney this week that it has already submitted a significant amount of data to the regulator, proving commissions are not a form on conflicted remuneration. 

However, when brokers are summoned by ASIC in the coming weeks, White is assuring them they should not be worried.

“The big thing is that this is not anything to be scared about,” he told Australian Broker

“The actual sampling of brokers is very small. I’m not allowed to divulge how many but it will be significantly less than 1,000 brokers. Most of the market won’t even know it’s happened. 

“But those that do get served notices, ASIC are very keen to let them realise that selection doesn’t mean there is an issue with what they are doing or that they’ve been targeted for anything. It isn’t being done on alpha order either – it is just a random selection.”

ASIC will be calling the brokers selected prior to sending notices requesting the data.