ASIC RG 204 — ASIC Regulatory Guide – RG 204 Applying for and varying a credit licence

Page 1 REGULATORY GUIDE 204 Applying for and varying a credit licence October 2020 About this guide This guide is for people who want to apply for an Australian credit licence that authorises them to engage in credit activities. This guide explains how to apply for a credit licence using the online application. It also explains how to apply for a variation of a credit licence if your business changes after you are granted a licence. This guide also provides a roadmap to other guidance that is useful for credit licensees and applicants for credit licences. Page 2 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 2 About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by:  explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)  explaining how ASIC interprets the law  describing the principles underlying ASIC’s approach  giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Document history This guide was issued in October 2020 and is based on legislation and regulations as at the date of issue. In May 2024, we updated RG 204.305– RG 204.309 to reflect the process for submitting core proof documents via the ASIC MOVEit portal. In December 2024, we updated the key points in Section G, RG 204.329 and RG 204.358 to refer to the Administrative Review Tribunal. In May 2025, we made changes at RG 204.123, RG 204.124, RG 204.144(e), RG 204.149, RG 204.164 and RG 204.238(f). These changes were made to reflect regulation of buy now pay later products as credit products under amending legislation, and to reflect regulation of debt management services as a credit activity. Previous versions:  Superseded Regulatory Guide 204, issued June 2010, reissued March 2012, February 2013 and April 2020. Disclaimer This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the credit legislation and other applicable laws apply to you, as it is your responsibility to determine your obligations. Examples in this guide are purely for illustration; they are not exhaustive and are not intended to impose or imply particular rules or requirements. Page 3 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 3 Contents A Overview ........................................................................................... 4 Do I need a credit licence? ................................................................ 4 How do I apply for a credit licence? ................................................... 5 What questions will I be asked? ........................................................ 6 What if my application is refused? ................................................... 11 What if my business changes? ........................................................ 11 B How do I apply for a credit licence? ............................................ 12 What do I need to do before I start my online application? ............. 12 How do I start my online licence application?.................................. 15 What happens to the information I send to ASIC? .......................... 16 What if I am unable to apply online? ............................................... 17 What is the application fee?............................................................. 17 C What questions will I be asked about my proposed credit business? ....................................................................................... 18 A1 Applicant and contact details ..................................................... 18 A2 Principal business address ........................................................ 20 A3 Contact details ............................................................................ 21 A4 Business names ......................................................................... 22 A5 Delayed licence commencement ............................................... 23 A6 Authorisation of credit activities .................................................. 23 A7 Details of business activities ...................................................... 27 D What questions will I be asked about compliance with the general conduct obligations?....................................................... 34 Arrangements and systems for compliance .................................... 34 B1 Fit and proper person to engage in credit activities ................... 35 B2 Compliance arrangements ......................................................... 42 B3 Supervising and training representatives ................................... 44 B4 Adequacy of resources............................................................... 45 B5 Dispute resolution and hardship applications ............................ 46 B6 Risk management ...................................................................... 47 B7 Compensation arrangements ..................................................... 48 E What supporting information will I need to provide? ................ 51 Summary of supporting information ................................................. 51 Information about each of your fit and proper people ...................... 52 Additional information about your responsible managers ............... 57 Overview of your proposed business .............................................. 57 Submitting core proof documents .................................................... 58 F What statements and declarations will I need to make? ........... 60 Required statement about past conduct or history .......................... 60 Declarations ..................................................................................... 62 How statements and declarations are made ................................... 63 G What if my application is refused? .............................................. 64 Reasons for refusing an application ................................................ 64 Referral to an ASIC delegate for a hearing ..................................... 64 H How do I vary my licence? ............................................................ 66 Where do I get a variation application form? ................................... 66 What questions will I be asked? ...................................................... 67 What if my variation application is refused? .................................... 69 Key terms ............................................................................................... 71 Related information ............................................................................... 75 Page 4 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 4 A Overview Key points Your first step is to decide whether you need an Australian credit licence (credit licence). You should read Regulatory Guide 203 Do I need a credit licence? (RG 203) to help you make this decision: see RG 204.1–RG 204.8. If you need a credit licence, you should apply online at www.asic.gov.au. The information you will be asked to provide in your application will be tailored depending on whether you are a ‘standard’ applicant, a ‘streamlined’ applicant, an Australian financial services (AFS) licensee and/or a body regulated by the Australian Prudential Regulation Authority (APRA). We will only grant you a credit licence if you meet the requirements in the National Consumer Credit Protection Act 2009 (National Credit Act). If we refuse your application, you cannot engage in credit activities. If there are changes to your business after your credit licence is granted, you may need to apply for a variation of your licence. Do I need a credit licence? RG 204.1 If you engage in credit activities you must be: (a) authorised to engage in those activities under a credit licence; (b) exempt from the requirement to be licensed; or (c) acting as a representative of another person who is licensed or exempt from the requirement to be licensed. RG 204.2 A credit licence authorises you and your representatives to engage in the credit activities that are specified in the licence. Who needs to be licensed? RG 204.3 Most people who engage in credit activities will need to be covered by a credit licence, either as a credit licensee or as a representative of a credit licensee. RG 204.4 When you are deciding whether you need to apply for a credit licence, you should think about: (a) whether your business will involve engaging in credit activities; and (b) whether any exemptions from the licensing requirements cover the credit activities that you will engage in. Page 5 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 5 RG 204.5 This guide provides you with information to help you apply for a credit licence. It does not contain guidance on whether you will need a credit licence. For more information on the types of credit activities that are regulated under the credit licensing regime and the people and activities that are exempt, see RG 203. Representatives of credit licensees or people who are covered by an exemption RG 204.6 If you engage in credit activities on behalf of another person (i.e. a principal) who either has a credit licence or is exempt from the requirement to hold a credit licence, you may be able to rely on your principal’s credit licence or exemption. RG 204.7 You will be a ‘representative’ of another person if you are: (a) an employee or director of the person, or of a related body corporate of the person; or (b) if the person is a credit licensee, you are authorised by them as a ‘credit representative’ under s64 or 65 of the National Credit Act. RG 204.8 If you only engage in credit activities as another person’s representative, you will not need to get your own credit licence. Before you decide to apply for a licence, you should think about whether your credit business will operate under another person’s licence or exemption. How do I apply for a credit licence? RG 204.9 To get a credit licence, you must complete an application (Form CL01 Australian credit licence application), lodge it with us and pay the application fee. RG 204.10 You are not automatically entitled to a credit licence. You will need to meet the requirements for a credit licensee, which include: (a) being able to comply with the general conduct obligations of credit licensees under the National Credit Act, which aim to ensure that you operate your credit business properly; and (b) being a fit and proper person to engage in credit activities. RG 204.11 For our guidance on how to comply with the general conduct obligations, see Table 3 in Section B. Page 6 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 6 Where do I get an application? RG 204.12 The application is an online form that can be accessed in the following ways: (a) If you are an AFS licensee, go to www.asic.gov.au and select ‘AFS licensees’ from the drop-down menu under ‘Use our online services’ (on the right side of the page). To log in to the application, you will need to use your AFS licence number and the username and password you selected when you registered for online access. Select ‘CL01’ to apply for a credit licence. (b) For other applicants, go to www.asic.gov.au/credit and follow the links to apply for a credit licence. As part of the process, you will be asked to enter a username and password of your choice and create a ‘Security question and answer’ in case you forget your password. RG 204.13 If you are unable to apply online (e.g. because you do not have access to the internet), you can ask us to approve lodgement of a paper application. However, we will only do this in extremely limited circumstances, and we will take this into consideration in determining whether you have adequate technological resources when we consider the nature, scale and complexity of your credit activities: see s47 of the National Credit Act. You will also pay a higher application fee if you lodge a paper application: see Section B. RG 204.14 For more detailed information about the process for making an application using our online credit licensing system, see Section B. What is the application fee? RG 204.15 The fee that is payable when you lodge your application is determined by the ASIC industry funding model, which commenced on 4 July 2018. Given the varying complexity of credit licence applications and variations, we use tiered fees to ensure that regulated entities pay an appropriate fee for the service we provide and to allow us to recover the actual cost of the time we spend on an application. RG 204.16 For more information on fees, see Section B. What questions will I be asked? RG 204.17 You are not automatically entitled to a credit licence. You will only be granted a credit licence if you meet the requirements set out in the National Credit Act. The online application is designed to obtain information to satisfy these requirements: see Table 1. Page 7 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 7 Table 1: The questions you will be asked and where to find our guidance on answering them Relevant part of the application What you will be asked Where to look in this guide You and your business A1–A7 You will be asked questions about who you are and the types of credit activities you propose to engage in under the credit licence. Section C Compliance with your obligations You will be asked questions to confirm that you will comply with your obligations under the National Credit Act if the credit licence is granted. Section D B1 You will be asked to identify each of the people who are involved in the management of your credit business. In the online application, these people are called your ‘fit and proper people’. You will be asked to indicate which of these people you rely on to demonstrate that you are competent to engage in credit activities. These people are called your ‘responsible managers’. Section D B2–B7 You will be asked for details about your compliance arrangements, your representatives, the adequacy of your resources and the dispute resolution, risk management and compensation systems that you have in place or will put in place by the time your licence is granted. Section D Supporting information To support your application, you will be asked to provide more detailed information about:  the past conduct of each of your fit and proper people;  the experience and qualifications of your responsible managers; and  what your credit business will involve and how it will be operated. Section E Statements and declarations You will make a statement about your past conduct, and that of each of your fit and proper people. You will declare that if you are granted a credit licence you will comply with your obligations as a credit licensee. If you engage in a credit activity by being a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to a carried over instrument and intend to also engage in other credit activities, you must declare that the application is made in relation to each of these credit activities. You will also make standard declarations about the reliability of the information provided in your application. Section F For more information about ‘carried over instruments’, see RG 204.27– RG 204.31 RG 204.18 We will assess the information that you provide in your application to decide whether you meet the licensing requirements. If we consider that we need more information about you or your proposed business before we make a decision, we will contact you. Page 8 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 8 RG 204.19 You can minimise the amount of time that we will need to spend on your application by: (a) properly describing the credit activities that you propose to engage in; (b) providing all the information that we ask for; and (c) promptly responding to our queries if we contact you to ask for more information. Streamlined applicants RG 204.20 The National Credit Act and associated regulations allow a streamlined application process for: (a) authorised deposit-taking institutions (ADIs); (b) general insurers registered with APRA under the Insurance Act 1973 (Insurance Act) that are included on the Register of General Insurers and Register of non-operating holding companies (NOHCs) and that: (i) offer mortgage insurance products; and (ii) engage in credit activities only as an assignee in relation to providing those mortgage insurance products (lenders mortgage insurers); and (c) life insurers registered with APRA under the Life Insurance Act 1995 that engage in credit activities only because of the operation of the terms and conditions of a life policy, or a document issued or given by the life insurer in relation to a life policy, that was entered into by the life insurer before 1 July 2010. RG 204.21 If you are a streamlined applicant, you will be asked to provide less information than standard applicants. We have explained which questions and supporting documents will be asked of streamlined applicants in Sections C, D and E. How do we assess streamlined applicants? RG 204.22 For streamlined applicants, the requirements in s37 of the National Credit Act do not apply. This means that we will not need to form a view on whether these types of applicant: (a) are likely to contravene the general conduct obligations if they are granted a credit licence (see s37(1)(b)); and (b) are not fit and proper persons to engage in credit activities (see s37A). RG 204.23 These applicants will need to make a statement that they will comply with the general conduct obligations if they are granted a credit licence: see RG 204.318(c). Page 9 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 9 RG 204.24 To make the required written statement about compliance with the general conduct obligations, we consider that streamlined applicants need to have arrangements and systems for compliance with the obligations in place at the time that their application is made, or processes to ensure that such arrangements and systems will be put in place before their licence is granted. As a part of the required statement, streamlined applicants will be asked some questions in the online application to confirm that they will comply with the general conduct obligations. RG 204.25 We must still refuse to grant a credit licence to a streamlined applicant if: (a) the applicant has not given a statement that they will comply with the general conduct obligations (if the licence is granted); (b) a banning order or disqualification order under Pt 2–4 of the National Credit Act is in force against the applicant in relation to a credit activity that would be covered by the licence; or (c) an order under the Crimes (Criminal Organisations Control) Act 2009 (NSW), the Criminal Organisation Act 2009 (Qld) or the Serious and Organised Crime (Control) Act 2008 (SA) (relevant State Criminal Organisations Acts) is in force against the applicant or a director, secretary or senior manager who would perform duties in relation to the credit activities to be authorised by the applicant’s licence. Note: See s40 of the National Credit Act. RG 204.26 Streamlined applicants will be asked to identify all of the people who are involved in the management of their credit business, and to provide some basic information about the roles and experience of those people, so that we can check that the applicant is not a person who is excluded from being granted a credit licence by s40 of the National Credit Act. Credit contracts and consumer leases made before 1 July 2010 RG 204.27 If you only engage in credit activities in relation to credit contracts or consumer leases entered into by you before 1 July 2010, you are a carried over instrument lender (COI lender) and you must either: (a) be a credit licensee; or (b) not be licensed under the National Credit Act and instead be regulated as an unlicensed COI lender, in which case you are subject to a modified statutory regime. Note 1: A ‘carried over instrument’ is a contract or other instrument that was made and in force, and to which an old Credit Code applied, immediately before 1 July 2010: see s4 of the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Transitional Act). Page 10 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 10 Note 2: The modified statutory regime for unlicensed COI lenders is set out in Ch 2 of the National Credit Act, as modified by Sch 2 to the National Consumer Credit Protection Regulations 2010 (National Credit Regulations). Schedule 2 to the National Credit Regulations was inserted by item [32] of Sch 1 to the National Consumer Credit Protection Amendment Regulations 2010 (No. 2) (Credit Amendment Regulations 2010 (No. 2)). Note 3: For more information on your options as a COI lender, see Information Sheet 110 Lenders with carried over instruments (INFO 110). RG 204.28 Some people who engage in credit activities in relation to credit contracts or consumer leases that were entered into before 1 July 2010 and that are carried over instruments will need to be a credit licensee. For example, you will need to be a credit licensee if you are: (a) assigned the rights of a credit provider lessor, mortgagee or beneficiary of a guarantee under a carried over instrument on or after 1 July 2010 (even if you will then only engage in credit activities for the purpose of collecting debts owed under those carried over instruments); (b) a credit provider, lessor, mortgagee or beneficiary of a guarantee under carried over instruments, but will also enter new credit contracts or consumer leases from 1 July 2010; or (c) a credit provider, lessor, mortgagee or beneficiary of a guarantee under carried over instruments, but will provide credit services in relation to any other credit contracts or consumer leases. RG 204.29 You cannot elect to be regulated as an unlicensed COI lender in relation to your carried over instruments and as a credit licensee for your credit activities in relation to new credit contracts and consumer leases. Note: Under regs 7A and 25F of the National Credit Regulations, we can only grant a credit licence to a person who engages in credit activities as a credit provider or lessor in relation to carried over instruments and also other credit activities if the application is made in relation to all of those credit activities. Regulations 7A and 25F of the National Credit Regulations were inserted by items [8] and [26], respectively, of the Credit Protection Amendment Regulations 2010 (No. 2). RG 204.30 If you apply for a credit licence, your application and the credit licence (if it is granted) will be in relation to all of your credit activities, including the credit activity of being a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to carried over instruments. RG 204.31 In your application, you will make a declaration that the application for a credit licence is made in relation to all of your credit activities, including the credit activity of being a credit provider, lessor, mortgagee or beneficiary of a guarantee in relation to carried over instruments: see Section F. Page 11 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 11 What if my application is refused? RG 204.32 If we refuse your application for a credit licence, you cannot engage in credit activities, unless: (a) you act as a representative of another person who: (i) holds a credit licence; or (ii) is exempt from the requirement to be licensed; or (b) you are a COI lender, and you: (i) will only engage in the credit activity of being a credit provider or lessor in relation to the carried over instruments; and (ii) notify ASIC that you will engage in this credit activity as an unlicensed COI lender. RG 204.33 We will give you reasons for our decision to refuse your application, and notify you of your rights to have that decision reviewed. For more information on your rights if we refuse your application, see Section G. What if my business changes? RG 204.34 If, after your credit licence is granted, your business changes, or the people who manage your business change, you may need to apply for a variation of your licence. For information on how to apply for a variation, see Section H. RG 204.35 You should be aware that we will assess an application based on the information you provide and you will be required to confirm that there has been no material change to the application before we will grant a licence. RG 204.36 We expect that you will finalise your plans for your credit business before making an application. Page 12 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 12 B How do I apply for a credit licence? Key points The credit licence application is an online application available on our website, including through online portals that we have established for the credit industry and AFS licensees: see RG 204.41–RG 204.55. You will be able to complete the online application quickly and easily if you go through the steps in Table 2 before you start your application. To get a credit licence, you will need to pay an application fee. The fee you pay is determined by the ASIC industry funding model, which commenced on 4 July 2018. Given the varying complexity of credit licence applications and variations, we use tiered fees to ensure that regulated entities pay an appropriate fee for the service we provide and to allow us to recover the actual cost of the time we spend on an application: see RG 204.56– RG 204.62 What do I need to do before I start my online application? RG 204.37 To get a credit licence, you must complete an application (Form CL01), lodge it with us and pay the application fee. RG 204.38 You are not automatically entitled to a credit licence. You will need to meet the requirements for a credit licensee, which include: (a) being able to comply with the general conduct obligations under the National Credit Act, which aim to ensure that you operate your credit business properly; and (b) being a fit and proper person to engage in credit activities. RG 204.39 Before starting your application for a credit licence, ensure that you have completed all the steps in Table 2. Table 2: Steps to take before starting an application for a credit licence Step Explanation 1 Think about the types of credit activities you will engage in as part of your business. You need to apply for an authorisation on your credit licence that is appropriate for your business. See Section C for an explanation of the authorisations you can choose from. 2 Read our guidance on the general conduct obligations of credit licensees and prepare your arrangements and systems to meet those obligations. If you are granted a credit licence, you must meet the general conduct obligations of credit licensees from day one. You will need to confirm in your application that you have arrangements and systems in place to ensure your compliance with these obligations. To find our guidance on the general conduct obligations, see Table 3. Page 13 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 13 Step Explanation 3 Do any background checks on your fit and proper people to allow you to provide the supporting information and make the required statements about their past conduct: see Section E, Table 5, and Section F, Table 6. Most applicants will need to provide copies of a national criminal history check and a bankruptcy check for each of the people who will manage their credit business. These checks can take a while to be completed. You should ask for these checks to be made at least six weeks before you plan to lodge your online application. If you are a streamlined applicant, you don’t need to provide copies of these checks, but you still need to be satisfied about the past conduct of the people who manage your business. You may need to ask for new checks to be completed if the information that you have about these people is out of date. 4 Make sure that you have authorised the person who prepares and submits the application to make required statements and declarations on your behalf: see Section F. All applicants must make a number of statements and declarations, and will be taken to have made those statements and declarations when the application is submitted. If another person is submitting the application on your behalf (e.g. because you are using a lodging agent), you need to authorise the person who physically submits the application (by pressing the ‘Submit’ button) to make those statements and declarations on your behalf. 5 If you are a company or AFS licensee, make sure your details on ASIC’s registers are correct. Some information will be pre-filled in your application from the Australian Company Register and the AFS Licensees Register. You cannot complete your online application until these registers are up to date. If you are a company, your changes must be made online. See our website for information about how to update your company details online. If you are an AFS licensee, you can update your details using the AFS licensees portal or Form FS20 Change of details for an Australian financial services licence. Changes will be processed more quickly if you update your details online. RG 204.40 When you are thinking about whether you will be able to comply with the obligations of credit licensees under the National Credit Act, you need to: (a) read our guidance on the general conduct obligations and how you can demonstrate that you will meet those obligations; (b) look at the arrangements and systems that you use, or plan to use, in your credit business. Think about whether these arrangements and systems will be adequate to meet your obligations as described in our guidance; and (c) look at any written plans that you already have that document your arrangements and systems. Think about whether these written plans demonstrate that your arrangements and systems are adequate. If you do not have any written plans, you should prepare some. Page 14 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 14 Table 3: Where to find our guidance on the general conduct obligations of credit licensees General conduct obligations Where to find our guidance Your broad compliance obligations Engage in credit activities efficiently, honestly and fairly Comply with the conditions on your licence Comply with the credit legislation Section C of Regulatory Guide 205 Credit licensing: General conduct obligations (RG 205) Information Sheet 97 Guidance for small credit businesses (INFO 97) Your internal systems Have risk management systems in place (if you are not regulated by APRA) Section D of RG 205 Have arrangements for ensuring that clients are not disadvantaged by conflicts of interest Section D of RG 205 Have dispute resolution systems in place Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165) Regulatory Guide 271 Internal dispute resolution (RG 271) Note: RG 165 applies to complaints received by financial firms before 5 October 2021, when RG 271 comes into effect. We will withdraw RG 165 on 5 October 2022. Your people Ensure that your representatives comply with the credit legislation Section E of RG 205 Ensure that your representatives are adequately trained and are competent Regulatory Guide 206 Credit licensing: Competence and training (RG 206) Maintain the competence to engage in credit activities RG 206 Your resources Have adequate human and technological resources (if you are not regulated by APRA) Section F of RG 205 Have adequate financial resources (if you are not regulated by APRA) Regulatory Guide 207 Credit licensing: Financial requirements (RG 207) Compensation Have compensation arrangements in place Regulatory Guide 210 Compensation and insurance arrangements for credit licensees (RG 210) Page 15 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 15 How do I start my online licence application? RG 204.41 The online licence application can be accessed from different parts of the ASIC website (www.asic.gov.au), depending on whether you are: (a) an AFS licensee registered for online access; or (b) a new applicant who has not previously lodged electronic documents with us. I am an AFS licensee RG 204.42 If you are already registered for online access, you can access the online application via the AFS licensees portal. RG 204.43 You will need your username, password and AFS licence number to log in to the AFS licensees portal. If you have forgotten your password, you can generate a new one after your identity has been verified using the security question and answer that you nominated when you registered for online access. If you have forgotten your username, we will send it to you by email if you click on ‘Forgotten username’ and enter your AFS licence number. RG 204.44 Once you have entered the AFS licensees portal, go to the ‘Start new transaction’ page and select ‘Start a credit licence application’. The licence application will appear in your ‘Current transactions’ list. I am a new applicant RG 204.45 To find the online licence application on our website, go to www.asic.gov.au/credit and click on ‘Getting a credit licence’, then ‘Applying for and managing your credit licence’. From this page, you can start or resume an application. Before you start your application you must read ASIC’s Electronic Lodgement Protocol and agree to be bound by its terms and conditions. This protocol covers your responsibilities and ours when you lodge documents with us online. Using the credit licensing system Controlling access to the online licence application RG 204.46 You will be asked to select a username and password so that you can control access to your licence application. Your username must have a minimum of six characters and your password a minimum of six characters (including at least one numeric character). Both your username and password are case- sensitive, so remember whether you have used upper or lower case. RG 204.47 You will also be asked to enter a security question and answer. The security question and answer will be used to verify your identity if you forget your password and need to generate a new one. You should choose a question that Page 16 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 16 only you know the answer to and that has nothing to do with your password. We suggest that the security question be a question for which there is only one answer, and that the answer be one or two words. You must remember the format of the security answer as the validation of the answer is case- and space-sensitive. If you do not provide the answer as originally entered, a new password will not be generated. RG 204.48 The credit licensing system will generate a reference number for your application and ask you to make a note of it. The security of your application reference number, username and password is your responsibility. Saving and resuming the application RG 204.49 After you have started your licence application, you can save it and resume it as many times as you like before you submit it. You will need your username, password and reference number to resume your application at a later time. If you forget your password, you can generate a new one after your identity has been verified using your security questions and answer. However, if you forget your username or reference number you will not be able to resume your application—you will need to start again. RG 204.50 The online licence application is designed so that you cannot progress to the next screen until you have completed the screen you are on, although you can go back to a completed screen to amend it. Your application is automatically saved to the ASIC server every time you hit ‘Next’. If you are disconnected from the internet or you close out of the application, you will have saved all information up until the question you were last entering. Pre-filled information RG 204.51 If you are an AFS licensee or a company, the credit licensing system will access other registers maintained by ASIC (e.g. the AFS Licensees Register and the Australian Company Register) to pre-fill some information. You need to check the pre-filled information to ensure that it is up to date. If it is incorrect, you will need to update that information in the other registers before you can complete your online licence application. To do that, you need to lodge the appropriate notification: see Table 2. You will not be able to resume your online application until this information has been updated. What happens to the information I send to ASIC? RG 204.52 The information you enter in your online application is protected by industry-standard encryption and stored on a secure server at ASIC. RG 204.53 The application lodged by you is not available to the public. If you are granted a credit licence, some basic information about your business will be uploaded to the Credit Licensee Register, which will be available to the public on our website. See the ASIC Privacy Policy for more information. Page 17 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 17 What if I am unable to apply online? RG 204.54 We expect all applications for a credit licence to be made online. If you cannot apply online, you will need to ask us to approve your use of a paper application. We will only do this in unusual circumstances when you have demonstrated that it is impossible to complete the application online. For more information, phone our Customer Contact Centre on 1300 300 630. RG 204.55 It will take longer to process paper applications because we have to enter your data into the credit licensing system. The application fee is also higher if you lodge a paper application. What is the application fee? RG 204.56 Fees for service under the ASIC industry funding model commenced on 4 July 2018. RG 204.57 Credit licence applications and variations may vary widely in their complexity. For this reason, we use tiered fees that are designed to reflect the varying complexity of the applications we receive. This ensures that regulated entities pay an appropriate fee for the service we provide and allows us to recover the actual cost of the time we spend on the application. RG 204.58 Please refer to Information Sheet 108 Fees for Australian credit licences and annual compliance certificates (INFO 108) for the schedule of our tiered lodgement fees for credit licence applications and licence variations. Note: The fees for licence applications and variations in INFO 108 are based on Sch 1 to the National Consumer Credit Protection (Fees) Regulations 2010. These fees, along with other credit fees, are also listed on our website in our Schedule of credit fees. RG 204.59 The credit licensing system will calculate the application fee and give you a payment advice when you submit your application. RG 204.60 Failure to pay the fee will not prevent your application from being accepted for lodgement. However, until you have paid the application fee, we will not grant you a credit licence. Will I be refunded if I withdraw my application? RG 204.61 The application fee is payable when you lodge your online application. RG 204.62 Your application is only considered as lodged with ASIC when we accept the application as lodged. If we reject your application for lodgement, you are entitled to a refund of the application fee. If we accept your application for lodgement, the application fee is no longer refundable even if you subsequently decide to withdraw your application. Page 18 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 18 C What questions will I be asked about my proposed credit business? Key points In Part A of your online licence application, you will be asked for information to identify yourself and the type of applicant you are: see RG 204.63–RG 204.102. You will also be asked: • to select the authorisation that you want on your credit licence (see RG 204.108–RG 204.130); • for a general description of your proposed business activities—some applicants will be asked additional questions if their proposed business activities involve additional requirements (see RG 204.131– RG 204.155); and • how many representatives you propose to have if you are granted a credit licence (see RG 204.156–RG 204.164). All applicants will be asked these questions. A1 Applicant and contact details Details of the applicant RG 204.63 You will be asked to provide information that identifies you. The way you will be asked for this information will depend on how you start your application. RG 204.64 If you start your application from the AFS licensees portal, details of your name, your entity type and any identifying numbers will be pre-filled. This includes your AFS licence number, Australian Business Number (ABN), Australian Company Number (ACN) or Australian Registered Body Number (ARBN). RG 204.65 If you start your application from the ‘Start or resume credit licence application‘ page, you will need to enter the following information. Entity type RG 204.66 Unless your details have been pre-filled, you need to select whether you are: (a) a company or registered Australian body; (b) a body corporate (other than a company or registered Australian body); (c) a partnership; (d) a multiple trustee; or (e) a natural person. Page 19 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 19 RG 204.67 A multiple trustee is a notional person that consists of two or more trustees of a single trust. As it is the notional person who is licensed (and not each trustee) the trustees of the trust can change from time to time without affecting the licence. RG 204.68 A person who is a sole trustee of a trust cannot apply as a multiple trustee— the application should be made under the appropriate entity type for that person (company, partnership or natural person). RG 204.69 The credit licensing system will tailor the application to the type of entity that you have selected. AFS licence number, ABN, ACN or ARBN (if any) or name of applicant RG 204.70 Unless your details have been pre-filled, you will be asked to provide your AFS licence number, ABN, ACN or ARBN, if you have one. RG 204.71 If you do not have one of these identifying numbers, you will need to enter your full name. If you are: (a) a body corporate (e.g. an incorporated association, incorporated statutory body or a cooperative)—you should enter your body corporate name; (b) a partnership—you should enter your firm name (and not simply a list of each of the partners). You will be required to provide the details of each partner in a different part of the application; or (c) a multiple trustee—you should enter your name as ‘The trustees of [name of trust]’. You will be required to provide the details of each trustee in a different part of the application. RG 204.72 If you enter an AFS licence number, ABN, ACN or ARBN, the credit licensing system will check whether an entity with that identifying number is a credit representative. If you are a credit representative, a message will be displayed to remind you that you cannot be authorised as a credit representative for the same type of credit activities that are covered by your credit licence. If your credit licence is granted, any authorisation you have to engage in the same types of credit activities as a credit representative will cease to have effect. RG 204.73 If you are a company or an AFS licensee, the credit licensing system will also access other registers maintained by ASIC to pre-fill parts of the online licence application. You will need to review all pre-filled information to ensure that it is up to date. If it is incorrect, you will need to update that information in the other registers before you can complete your online licence application. To do that, you need to lodge the appropriate notification: see Section B, Table 2. You will not be able to resume your online licence application until this information has been updated. RG 204.74 If you do not have an ABN, you can apply for one online through the Australian Business Register. Page 20 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 20 Regulation by, or registration with, APRA RG 204.75 You must indicate whether you are a body regulated by APRA, or one that is registered with APRA under the Financial Sector (Collection of Data) Act 2001, and what type of regulated or registered body you are. RG 204.76 This question affects the assessment process, and helps to inform ASIC about the types of entities that are operating in the credit industry. RG 204.77 If you are a body regulated by APRA, not all of the licensee obligations under the National Credit Act apply and you will not be asked some questions in the application that relate to those obligations. RG 204.78 If you are an ADI, a lenders mortgage insurer or a life insurer that lends in accordance with the terms and conditions of a life policy entered into before 1 July 2010, you will also have the benefit of the streamlined application process: see RG 204.20–RG 204.26. Applicants that are part of a group RG 204.79 You must indicate whether you are part of a group of companies that is applying for more than one credit licence, and provide the names of any other applicants in the group. RG 204.80 We will endeavour to assess together all credit licence applications that are made by applicants from the same group, to ensure that these applications are dealt with efficiently and consistently. Lodging agents RG 204.81 You need to indicate whether you are lodging the application on behalf of an applicant. If you are, you will need to make an additional declaration before you submit the application: see Section G. A2 Principal business address RG 204.82 You will be asked to enter your principal business address. If you are granted a licence, this information will be included in the Credit Licensee Register. RG 204.83 This information will be pre-filled for: (a) AFS licensees—from the principal business address listed in the AFS Licensees Register; and (b) companies—from the principal place of business address listed in the Australian Company Register. RG 204.84 If there has been a change to your principal business address, you need to notify us of that change by lodging Form FS20 (if you are an AFS licensee) Page 21 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 21 or by changing your company details on our website, and the change must be recorded in those other registers, before you can complete the online application. RG 204.85 Your online application will be saved and you can resume it from this question after this information has been updated. Use of an alternative address in the public register RG 204.86 If your principal business address is your residential address, and you are concerned that publication of your residential address on the public register will put at risk your safety or the safety of your family, you can nominate an alternative address to be included in the register. The alternative address must be an address within Australia at which you can be served with documents. This must be a street address and not a post office box. RG 204.87 You will not be able to nominate an alternative address if you are a company or an AFS licensee, because the details of your principal business address are already publicly available through other registers we maintain. RG 204.88 If an alternative address is recorded in the public register, you will need to notify us within 10 days of any changes to that address. You must also notify us within 14 days if there are any changes to your residential address. You can do this by lodging Form CL20 Notification of change of credit licence details. A3 Contact details RG 204.89 The contact person can be you, one of your officers or employees, or another person who is preparing the application on your behalf. RG 204.90 During the application process, we will direct any questions and correspondence about your application to this contact person. RG 204.91 If you are granted a credit licence, any general correspondence will be sent to this contact person by email. Any formal correspondence will be sent to your principal business address. RG 204.92 The details of this person will not be included in the public register of credit licensees. However, if you are granted a licence, you will need to keep the details of your contact person (including their email address) up to date by lodging Form CL20. This will assist us when we communicate with you in the future. Page 22 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 22 A4 Business names RG 204.93 You will be asked to enter details of any registered business name under which you conduct business. RG 204.94 A business name is a name or title under which a person carries on business—for example, Roxy café or Hollingdale & Page. RG 204.95 From 28 May 2012, business names are registered in a national register maintained by ASIC (Business Names Register). Before that date, business names were registered in each state or territory in which the business or trade was carried out. RG 204.96 If your business name was registered after 28 May 2012, you will need to have an ABN to register a business name. In your credit licence application, you can specify your ABN as the number for the business name. RG 204.97 If your business name was registered in a state or territory before 28 May 2012 and transferred to the national register, it may not be linked to an ABN. If you have not yet linked your business name to your ABN, you may need to include details of the previous state or territory registered business name. Under the previous registration systems, each business name had an individual number but the format and length varied according to the state or territory of issue. The state of registration precedes the number—for example, ‘NSW E6882145’, ‘QLD BN2027148’ or ‘SA 0341685J’. Note: For more information on the national Business Names Register and how to register a business name, see Regulatory Guide 235 Registering your business name (RG 235) and the information on our website at www.asic.gov.au/business-names. RG 204.98 If you are granted a licence, this information will be included in the Credit Licensee Register. RG 204.99 If you are an AFS licensee, this question will be pre-filled with the details of business names listed in the AFS Licensees Register. These pre-filled details cannot be removed. If these registered business names are no longer current, you will need to notify us of that change by lodging Form FS20, and the change must be recorded in that other register, before you can complete the online application. RG 204.100 Your online licence application will be saved and you can resume it from this question after this information has been updated. RG 204.101 If you have additional registered business names that will apply to your credit activities, you can add the details of additional names. RG 204.102 If you need to look up your business name details, you can do a business name search by clicking the link in the online application. For full information on registered business names, see our website at www.asic.gov.au/business-names. Page 23 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 23 A5 Delayed licence commencement RG 204.103 You can request a delay to the commencement of your credit licence (if it is granted). You may wish to do this to, for example: (a) have additional time to make sure that your business systems and processes will be in place before you start to engage in credit activities under your credit licence; or (b) ensure that your obligation to prepare and lodge an annual compliance certificate arises at a convenient time for you. Note: As a credit licensee, you must lodge an annual compliance certificate every year within 45 days of your annual compliance date. Your annual compliance date is the anniversary of the day on which your licence commenced. RG 204.104 The delayed commencement date must be within three months of the date that you submit your online application. RG 204.105 If we decide to grant a credit licence with a delayed commencement, we will issue a credit licence that specifies the date on which it will take effect (the effective date). RG 204.106 If you are granted a credit licence with a delayed commencement, you will not be able to engage in credit activities until the effective date. RG 204.107 It is important to note that we may cancel a credit licence if the licensee does not engage in credit activities authorised by the licence before the end of six months after the licence is granted. If you do not engage in credit activities within this time, you must lodge a notification with ASIC before the end of 15 business days after the end of the six months providing information about why you have failed to do so. A6 Authorisation of credit activities RG 204.108 You will be asked to select the authorisation that covers the types of credit activities you want to engage in. RG 204.109 You can choose: (a) engage in credit activities other than as a credit provider or lessor; (b) engage in credit activities as a credit provider or lessor; or (c) engage in all credit activities. RG 204.110 You should only choose the authorisation that is necessary to cover the credit activities that you propose to engage in if you are granted a licence. RG 204.111 You should not choose an authorisation that covers credit activities that you do not propose to engage in ‘just in case’ your business changes. If your Page 24 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 24 business changes after you are granted a licence, you should apply for a variation to your licence. See Section H for more information on varying your credit licence. RG 204.112 We will check the authorisation you have selected against the information you include in your application about your intended business activities (i.e. your ‘Details of business activities’ and the supporting document ‘Summary business description’). If the selected authorisation does not seem to be appropriate for the description you have provided, we will contact you. This may cause a delay in our assessment. RG 204.113 We will take into account the authorisation you select when we assess the information in your application about your competence to engage in the credit activities that will be covered by the licence (if granted). If we consider that you are not competent to engage in credit activities covered by the authorisation that you select, we may refuse your application or decide to offer you a licence with a different authorisation. What do the authorisations cover? Engage in credit activities other than as a credit provider or lessor RG 204.114 This authorisation covers: (a) the provision of credit services (including providing credit assistance and acting as an intermediary) in relation to a credit contract or consumer lease when you are not the credit provider or lessor; and (b) performing the obligations or exercising the rights of a credit provider, mortgagee, beneficiary of a guarantee or a lessor in relation to the following when you are not the credit provider or lessor: (i) a credit contract; (ii) a mortgage that secures obligations under a credit contract; (iii) a guarantee that guarantees obligations under a credit contract; or (iv) a consumer lease. RG 204.115 We expect that this authorisation will be appropriate for all non-credit providers. For example, we expect that you will need to select this authorisation if you are: (a) a mortgage broker, finance broker, financial planner or adviser, or other type of intermediary between the consumer and credit provider; (b) a mortgage manager who manages a credit contract on behalf of a credit provider (but who has not been assigned any rights under the contract); or (c) an aggregator. Page 25 REGULATORY GUIDE 204: Applying for and varying a credit licence © Australian Securities and Investments Commission October 2020 Page 25 Engage in credit activities as a credit provider or lessor RG 204.116 This authorisation covers: (a) carrying on a business of providing credit to which the National Credit Code applies or providing consumer leases; (b) being a credit provider under a credit contract or a lessor under a consumer lease; (c) performing the obligations or exercising the rights of a credit provider, mortgagee, beneficiary of a guarantee or a lessor in relation to the following when you are the credit provider or lessor: (i) a credit contract; (ii) a mortgage that secures obligations under a credit contract; (iii) a guarantee that guarantees obligations under a credit contract; or (iv) a consumer lease; and (d) providing credit assistance to a consumer in relation to a credit contract or consumer lease when you are the credit provider or lessor. RG 204.117 You may be carrying on a business of providing credit or consumer leases if you engage in pre-contractual conduct for the purpose of entering into credit contracts or consumer leases as a credit provider or lessor. RG 204.118 You will be the credit provider or lessor when you are either: (a) the original credit provider or lessor; or (b) a person to whom the rights of another credit provider or lessor have been assigned or passed by law. RG 204.119 An original credit provider or lessor is a person who provides credit under a credit contract or consumer lease that is the initial holder of rights under the credit contract or consumer lease (i.e. a person who has not become a credit