Credit licence applications: Providing information for fit and proper people

This is Information Sheet 244 (INFO 244). It is for all Australian credit licence (credit licence) applicants.

As a result of recent amendments to the National Consumer Credit Protection Act 2009 (National Credit Act), applicants for a new or varied credit licence must provide additional information and documents as part of their application.

We need additional information to be satisfied that there is no reason to believe that the applicant, or any relevant persons associated with the applicant, are not fit and proper persons.

Information on the application process

Regulatory Guide 204 Applying for and varying a credit licence (RG 204) provides applicants with information on how to apply for a credit licence or a variation to their existing licence. It also provides a roadmap to other guidance that is useful for credit licensees and applicants for credit licences.

Fit and proper people

Before we can grant a credit licence, we must be satisfied that there is no reason to believe you are not a fit and proper person to engage in the credit activities that will be covered by that licence. To determine this, we consider whether there is any reason to believe that any of the people involved in managing your credit business are not fit and proper to perform that role (we call those people your ‘fit and proper people’).

On 18 February 2020, the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures) Act 2020 amended the National Credit Act to improve the regulatory tools available to ASIC.

The amendments require ASIC to obtain additional information to consider when assessing applications for either a new or varied credit licence. Now we must assess whether a wider range of people are ‘fit and proper people’ as set out in section 37A of the National Credit Act.

Who ASIC must consider as fit and proper persons

Before the February 2020 amendments commenced, we already considered whether we had no reason to believe that the following are not ‘fit and proper persons’:

• if you are a company or other body corporate, your directors and secretaries, and any senior managers who will perform duties in relation to credit
• if you are a partnership or multiple trustees of a trust:
  • the partners or trustees who will perform duties in relation to credit
  • and a partner or trustee is a body corporate – the directors and company secretaries of the partner or trustee, or
• if you are a natural person, you.

As a result of the amendments we must now also consider whether the following people are fit and proper persons:

• any officer of a body corporate applicant, regardless of whether they perform duties in relation to credit
• any senior manager of a partnership or multiple trustee or a trust applicant
• any controller of the applicant
• if a controller is a body corporate, any officer of the controller
• if a controller is a partnership, any partner or senior managers of the controller
• if the controller is multiple trustees of a trust, any trustees or senior managers of the controller.

Note: For further information on who is a controller, see section 16A of the National Credit Act.

An ‘officer’ is defined in the Corporations Act 2001 (Corporations Act), and includes:

• a director or secretary of the body corporate
• a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the body corporate’s business, or who has the capacity to significantly affect the body corporate’s financial standing
• a person whose instructions or wishes the directors of the body corporate are accustomed to act on (excluding advice given by the person in a professional capacity or as part of their business relationship with the directors or the body corporate).

Note: For the full definition of ‘officer’, see section 9 of the Corporations Act.

A ‘senior manager’ is defined in the Corporations Act as a person who:

• makes, or participates in making, decisions that affect the whole, or a substantial part, of the applicant’s business, or
• has the capacity to affect significantly the financial standing of the applicant.

What information must be provided

So we can consider these matters, all applicants seeking a credit licence, or a variation to their existing licence, must give ASIC the following details about each of their fit and proper people:

• their full name
• their position and a short description of their duties
• their residential address
• if they are fit and proper people due to their relationship with the controller of the applicant, the details of the controlling entity.

We have provided a template to help applicants set out their fit and proper people (Word 101 KB) and provide ASIC with the information we require, depending on the type of entity making the application.

For each of their fit and proper people, an applicant must provide the following People Proofs (which must be no more than 12 months old):

• a national criminal history check
• a bankruptcy check
• a completed Statement of Personal Information (Word 87 KB).

In all cases, we will require People Proofs for:

• a natural person applicant
• all officers of a body corporate applicant
• all partners of a partnership applicant
• all trustees of a multiple trustee applicant
• natural person controllers (see Note 2 below).

Note 1: For further guidance on the People Proofs, see Section E of RG 204.

Note 2: Exceptions to the required People Proofs may be available in relation to controllers and officers of intermediate entities of a corporate group that controls the applicant, and natural person officers and controllers of the ultimate holding entity of a corporate group that controls the applicant (see below).

Permissible certification for some fit and proper people

In lieu of criminal history checks, bankruptcy checks and statements of personal information, we will accept a certification in relation to officers, partners, trustees and senior managers of an intermediate controller (permissible certification): see section 37A(1)(e)–(f) of the National Credit Act. To help applicants, we have provided a certification template.

We will not accept a certification for the officers of any ultimate holding company of an applicant.

Even when the applicant provides a permissible certification, we may subsequently request information (including criminal history and bankruptcy checks and statements of personal information) against one or more of these permissible certification people when assessing the application.

Evidence that some fit and proper people are subject to equivalent requirements

We may also accept alternative evidence in lieu of criminal history checks, bankruptcy checks and statements of personal information for any officers, partners, trustees and senior managers of the ultimate controller of an applicant where the applicant provides sufficient evidence that the relevant natural person is subject to an equivalent fit and proper person requirement in another regulatory regime. If an applicant cannot demonstrate this to our satisfaction, the applicant will need to provide a criminal history check, bankruptcy check and statement of personal information for each relevant person.

Please note, we may subsequently request information (including criminal history and bankruptcy checks and statements of personal information) against one or more of the applicant’s fit and proper people even if they are subject to a fit and proper person requirement in another regime.

Where can I get more information?

• Read RG 204 Applying for and varying a credit licence
• Call ASIC on 1300 300 630 or ask a question online

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.

You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases, your particular circumstances must be taken into account when determining how the law applies to you.