Introduction

Licensees must comply with the ASIC Reference checking and information sharing protocol set out in ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 (ASIC protocol) as an obligation under their licence.

The ASIC protocol is made under section 912A of the Corporations Act 2001 (Corporations Act) and section 47 of the National Consumer Credit Protection Act 2009 (National Credit Act).

The ASIC protocol sets out obligations that apply to you as a licensee. It is intended to promote better information sharing about the performance history of prospective financial advisers and mortgage brokers.

Transitional period

The ASIC protocol contains a transitional provision allowing licensees to request a reference about a prospective representative in accordance with the ASIC protocol or the ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429 (2021 protocol) until 28 February 2025.

From 1 March 2025, all references must be requested under the ASIC protocol.

References requested in accordance with the 2021 protocol must be in the form of a template reference request in Schedule 2 or Schedule 3 to the 2021 protocol.

References requested in accordance with the ASIC protocol must be in the form of a template reference request in Schedule 3, Schedule 4 or Schedule 5 to the ASIC protocol.

Who the ASIC protocol applies to

The ASIC protocol applies to:

• a ‘recruiting licensee’ – that is, a licensee that is considering employing or authorising a prospective representative as a financial adviser or mortgage broker
• a ‘future mortgage intermediary’ – that is, a mortgage intermediary (e.g. an aggregator) that is considering whether to act as an intermediary for a relevant mortgage broker (i.e. an individual mortgage broker that is either a credit licensee or a current or prospective representative of a credit licensee), and
• a ‘referee licensee’ – that is, an individual’s current licensee(s), former licensee(s) in the past 5 years, current mortgage intermediary and/or former mortgage intermediary in the past 5 years from whom a reference is sought.

Note: A financial adviser is a person who provides personal advice to retail clients about relevant financial products. ‘Relevant financial products’ are financial products other than basic banking products, general insurance products, consumer credit insurance, or a combination of any of these products.

A ‘prospective representative’ includes:

• a current or former representative of a referee licensee who is or was a financial adviser or mortgage broker and is seeking to act in the same capacity for a recruiting licensee
• a current or former representative of a referee licensee who has engaged in other activities for the referee licensee (e.g. general customer service, para-planning, collections, bank-teller activities, mobile lending) and is seeking to become a financial adviser or mortgage broker
• a current or former financial adviser representative of a referee licensee who is seeking to become a mortgage broker representative
• a current or former mortgage broker representative of a referee licensee who is seeking to become a financial adviser representative, and
• a licensee in their own right who is seeking to become a financial adviser or mortgage broker representative.

The ASIC protocol requires a recruiting licensee to request a reference about the prospective representative from the individual’s referee licensee(s).

The ASIC protocol also provides that a future mortgage intermediary may request a reference about a relevant mortgage broker for whom they are considering acting as an intermediary from the broker’s referee licensee(s).

The referee licensee(s) must then give a reference to share information with:

• the recruiting licensee about the prospective representative, and/or
• the future mortgage intermediary about the relevant mortgage broker.

Note: Where the prospective representative is currently a licensee in their own right, the recruiting licensee must ask for a reference from the prospective representative about their conduct as a licensee.

Reference checking and background checks

Reference checking is one part of the screening process that licensees should undertake when deciding whether to employ or authorise a prospective representative as a financial adviser or mortgage broker.

Licensees are subject to general conduct obligations, which include taking steps to ensure that their representatives comply with financial services laws or credit legislation. ASIC expects that these steps will include undertaking appropriate background checks beyond reference checking before authorising new representatives.

Note: Regulatory Guide 104 AFS licensing: Meeting the general obligations (RG 104) and Regulatory Guide 205 Credit licensing: General conduct obligations (RG 205) contain examples of appropriate background checks (e.g. referee reports, searches of ASIC’s register of banned and disqualified persons and police checks).

When a recruiting licensee must or may obtain a reference

When a recruiting licensee must obtain a reference

As a recruiting licensee, you must take reasonable steps to obtain a reference from a referee licensee before you employ or authorise a prospective representative.

The referee licensee(s) from whom you must seek a reference are listed at Table 1. Your obligation to obtain a reference as a recruiting licensee is set out in section 5 of the ASIC protocol.

What are ‘reasonable steps’?

‘Reasonable steps’ include:

• seeking written consent from a prospective representative to request a reference, and
• if consent is given – requesting a reference from the referee licensee(s) in accordance with the ASIC protocol.

Note: ‘Reasonableness’ in the context of ‘reasonable steps’ has the general law meaning. If a recruiting licensee has taken the steps required by the ASIC protocol to request a reference but does not receive a reference from a referee licensee, it should determine whether the steps it has taken are reasonable. To determine whether the steps are reasonable, the recruiting licensee should take into account the facts and circumstances of the situation – for example, whether it has confirmed that its request was in fact received and/or has taken any steps to follow up its request with the referee licensee.

Sub-authorisation

Obligations under the ASIC protocol also apply to recruiting licensees where a corporate representative, with a licensee’s consent, sub-authorises an individual under section 916B of the Corporations Act or section 65 of the National Credit Act to provide personal advice about relevant financial products or mortgage broking services.

Recruiting licensees must take reasonable steps to conduct reference checking in accordance with the ASIC protocol about each sub-authorised individual. You may decide what arrangements to put in place to ensure you comply with the ASIC protocol in such situations, since the protocol allows licensees to authorise agents to meet their responsibilities.

Your obligation to obtain a reference as a recruiting licensee for sub-authorised individuals is set out in section 5(3) of the ASIC protocol.

Who is a referee licensee?

A referee licensee in relation to a prospective representative of a recruiting licensee is the prospective representative’s current licensee or former licensee in the past 5 years, as well as their current mortgage intermediary or former mortgage intermediary in the past 5 years, from whom a reference is sought.

As a recruiting licensee, you must take reasonable steps to obtain a reference for a prospective representative from the licensees described in Table 1 as the minimum requirement.

Table 1: Licensees from whom a recruiting licensee must seek a reference

Licensees from whom a recruiting licensee may seek additional references

In addition to the minimum prescribed licensees in Table 1 from whom you must request references, as a recruiting licensee, you may also request references from other former licensees that employed or authorised the prospective representative in the past 5 years. You may also request references from current mortgage intermediaries or former mortgage intermediaries who acted as an intermediary to the individual in the past 5 years.

For example, you may want to know about any systemic issues relating to a prospective representative, including repeated conduct or performance issues that demonstrate the individual has not responded to remedial action. This information may only come to light from references given by a prospective representative’s other former licensees or mortgage intermediaries.

Other former licensees who employed or authorised the prospective representative in the past 5 years, or current mortgage intermediaries or former mortgage intermediaries who acted as an intermediary in the past 5 years, who receive a request for a reference from you in accordance with the ASIC protocol, are obliged to give a reference about a prospective representative’s conduct for the 5 years before the reference is given.

Note: A recruiting licensee is not required to obtain a reference where a prospective representative is not currently employed or authorised by a current licensee, and the most recent former licensee(s) from whom the recruiting licensee is required to obtain a reference no longer holds a licence. In these circumstances, the recruiting licensee should consider obtaining a reference(s) in accordance with the ASIC protocol from any other former licensee(s) that the prospective representative was employed or authorised by in the past 5 years, or current mortgage intermediaries or former mortgage intermediaries who acted as an intermediary in the past 5 years.

When a future mortgage intermediary may request a reference

As a future mortgage intermediary, you may request a reference about a relevant mortgage broker from a referee licensee to consider whether to act as an intermediary for that broker, with the written consent of the broker.

Referee licensees in relation to a relevant mortgage broker are the current and former licensees and/or current and former mortgage intermediaries that acted as an intermediary to the broker in the past 5 years.

Your obligation to seek consent is set out in section 6 of the ASIC protocol.

When a recruiting licensee and future mortgage intermediary request a reference for the same individual

When a recruiting licensee and a future mortgage intermediary intend to request a reference in relation to an individual who is a prospective representative and relevant mortgage broker, the recruiting licensee or the future mortgage intermediary may authorise the other as their agent to obtain the reference in accordance with the ASIC protocol: see Agents acting on behalf of licensees.

This allows the recruiting licensee or the future mortgage intermediary to obtain one reference from the referee licensee in relation to the relevant individual on their own behalf and as an agent for the other party requesting a reference.

For a reference to be obtained by the recruiting licensee or the future mortgage intermediary as an agent for the other, the parties must ensure that the individual who is a prospective representative and relevant mortgage broker provides consent for the recruiting licensee and the future mortgage intermediary to obtain a reference. Consent may be obtained by one party acting as an agent for the other.

Licensee requesting reference must seek consent

Under the ASIC protocol, personal information about a prospective representative or relevant mortgage broker can only be shared with their consent.

Before requesting a reference, you must obtain written consent from a prospective representative or relevant mortgage broker for the reference(s) to be obtained.

Your obligation as a licensee to seek the consent of the individual when requesting a reference is set out in section 6 of the ASIC protocol.

Compliance with this obligation ensures that personal information is being handled consistently with the consent of a prospective representative or relevant mortgage broker, and that the collection, use, disclosure and storage of that personal information by licensees does not breach the Australian Privacy Principles contained in the Privacy Act 1988 (Privacy Act).

Under the Australian Privacy Principles (APP) guidelines (July 2019), consent must be given for a specific purpose, and information must only be collected, used and disclosed for that purpose. Information you collect under the ASIC protocol must only be used, disclosed and stored for the purpose of:

• considering either:
• a prospective representative’s suitability for employment or authorisation, or
• whether to act as an intermediary in relation to a relevant mortgage broker, and
• complying with the general conduct obligations of a licensee.

If you are an APP entity, you will also need to comply with APP 5 by notifying the prospective representative or relevant mortgage broker about the collection of their personal information.

Template consent forms

ASIC has provided template consent forms you must use when complying with the ASIC protocol: see Schedules 1 and 2 to the ASIC protocol.

If consent or a reference is refused

You will not be able to request a reference from a referee licensee(s) under the ASIC protocol if a prospective representative or relevant mortgage broker does not give you written consent to request a reference.

The prospective representative or relevant mortgage broker can also withdraw their consent at any time. Unless it is withdrawn earlier, a consent will cease 12 months after it is given: see Withdrawal and ceasing of consent.

While the ASIC protocol does not prohibit you as the recruiting licensee employing or authorising a prospective representative in these circumstances, you will need to consider, and be able to demonstrate that you complied with, your general conduct obligations as a licensee if you decide to employ or authorise the prospective representative.

The ASIC protocol also does not prohibit you employing or authorising a prospective representative if you have taken reasonable steps to request a reference and a referee licensee fails to comply with their obligation to give you a reference, or if you receive a reference that contains adverse information about the prospective representative. In these circumstances, you will similarly need to consider, and be able to demonstrate that you complied with, your general conduct obligations if you decide to employ or authorise the prospective representative.

For example, you will need to ensure that the prospective representative is adequately trained, is competent and complies with relevant legislation. This means you may need to do additional background checks or assessments before employing or authorising the individual, as well as additional monitoring and supervision after they are employed or authorised.

If you are a future mortgage intermediary, it is a matter for you to decide whether to act as an intermediary for a relevant mortgage broker where:

• the relevant mortgage broker has withdrawn their consent
• a referee licensee has failed to give you a reference about the relevant mortgage broker, or
• you receive a reference that contains adverse information about the relevant mortgage broker.

Note: RG 104 and RG 205 provide guidance on licensee obligations relating to monitoring and supervising representatives.

Withdrawal and ceasing of consent

A prospective representative or relevant mortgage broker who has previously given consent for references to be obtained may withdraw their consent in writing (including by email) at any time. You cannot then rely on their past consent to request a reference or update from a licensee under the ASIC protocol or for any future use or disclosure of their personal information.

Unless withdrawn earlier, a consent will cease 12 months after it is given.

Where consent is withdrawn (or has ceased) and the referee licensee(s) has not yet given you a reference or update, you must also provide written notice to the referee licensee(s) of that withdrawal (or cessation).

Note: The APP guidelines (July 2019) provide further information on withdrawing consent.

How to request a reference

Provided you obtain written consent from a prospective representative or a relevant mortgage broker to obtain references from one or more referee licensees, you must ask the referee licensee(s) in writing to answer the questions in the correct template reference request about the prospective representative or relevant mortgage broker.

You must include a copy of the prospective representative or relevant mortgage broker’s completed consent with your reference request.

You may make minor amendments to the format of the template reference request, as long as your amended request includes all the information required by the questions in the template reference request. You must not amend or alter any of the questions.

Your obligations as a licensee when requesting a reference are set out in section 7 of the ASIC protocol.

Timing of reference requests

You have some flexibility in when to make a reference request. For example, in consultation with a prospective representative or relevant mortgage broker, this may be:

• at the beginning of the recruitment decision-making process
• at the end of the recruitment decision-making process, or
• if you are making an offer of employment or authorisation subject to satisfactory reference checking – before the prospective representative starts in their new role.

Note: See Section 2 of Reference checking in the financial services industry issued by ASIC and Standards Australia in October 2007 (Standards Australia handbook) for guidance on the timing of reference requests.

Requesting a clarification or update from a referee licensee

You may request a clarification or update from a referee licensee about information they originally gave to you in a reference before deciding whether to employ or authorise a prospective representative, or to act as an intermediary to a relevant mortgage broker.

For example, an unresolved inquiry or investigation may be in progress for the prospective representative or relevant mortgage broker at the time the referee licensee gives you an initial reference. You may wish to defer your decision about whether to employ or authorise the prospective representative, or to act as an intermediary to the relevant mortgage broker, and seek an update from the referee licensee on the unresolved matter at a later stage.

Your request for a referee licensee to clarify or give further details about information they originally gave you in a reference, must be made in writing. However, you do not need to make the request in the form of the template reference request.

Any requests for clarifications or updates and responses to such requests form part of the records required to be kept by you under the ASIC protocol.

Requesting information outside the ASIC protocol

The template reference request asks a prescribed set of questions to give you an overview of the prospective representative or relevant mortgage broker’s conduct and performance history.

You may also want to request information about a prospective representative or relevant mortgage broker that is additional to the template reference request to help you in making a decision (e.g. background checking information as part of the wider screening process and other information from the Standards Australia handbook).

The ASIC protocol does not limit or prevent you from requesting additional information from a referee licensee(s), provided your request does not reduce the scope of the template reference request.

However, the referee licensee is not obliged under the ASIC protocol to share with you information that is additional to the prescribed questions.

The defence of qualified privilege does not apply to any information that a referee licensee shares with you outside the ASIC protocol (i.e. information that is additional to the information provided in response to the template reference requests).

We expect you to ensure that you comply with the Australian Privacy Principles in relation to any additional information you seek from a referee licensee. This includes:

• seeking consent from a prospective representative or relevant mortgage broker to ask for any additional information and identifying the purpose for which it is being sought
• giving a copy of the completed consent to the referee licensee(s), and
• explaining to the referee licensee(s) why the additional information is being requested.

Referee licensee must give a reference

Your obligations as a referee licensee are set out in section 8 of the ASIC protocol.

You must respond in writing to a licensee’s request for a reference within 10 business days, unless you both agree to a longer period (up to a maximum of 30 business days).

Note: You must not give a reference if the requesting licensee has not given you a copy of the written consent of the prospective representative or relevant mortgage broker, or if the requesting licensee has given you written notice that the prospective representative or relevant mortgage broker has withdrawn their consent.

You must give a written reference that includes all the information you are aware of and reasonably consider to be relevant to answer the template reference request.

Your response should be complete, accurate and based on documented facts that have been verified. Information given in a reference should be objective and relevant to the role and the information required by the template reference request.

You should give information that is:

• factual – subjective information or opinions should be avoided and the information should be able to be substantiated, and
• current and complete – it should accurately address current circumstances and historical performance.

If you are unable to answer any of the questions in the template reference request, you must explain in writing why you cannot answer them.

You do not need to give additional information requested by a licensee that is not covered by the template reference request.

In addition, you only need to give information about the conduct of the prospective representative or relevant mortgage broker that occurred up to 5 years before you give the reference.

Although you are not prohibited from sharing information with a requesting licensee about the conduct of a prospective representative or relevant mortgage broker that occurred more than 5 years before the reference is given, or that goes beyond the template reference request, the defence of qualified privilege does not apply to such information that is shared outside the obligations of the ASIC protocol.

Defence of qualified privilege

To enable licensees to share information honestly and frankly, the defence of qualified privilege applies when you share information in accordance with the ASIC protocol. The defence of qualified privilege allows open communication in certain relationships without the risk of defamation action.

This defence applies if you give information about a prospective representative who is currently, or was previously, your representative, or about a relevant mortgage broker for whom you currently act or previously acted as an intermediary, because you are obliged to do so under section 8 of the ASIC protocol.

It does not apply to any information you share that you are not obliged to give (e.g. information about conduct that occurred more than 5 years ago or information that is additional to the template reference request). Also, you are not liable for any action based on breach of confidence relating to your obligation to share information under the ASIC protocol.

Template reference requests

The template reference requests set out in Schedules 3, 4 and 5 to the ASIC protocol ask for information about a prospective representative or relevant mortgage broker in the past 5 years. Schedule 3 applies to reference requests for all prospective representatives, except where the prospective representative is a licensee in their own right – in which case Schedule 4 applies. Schedule 5 applies to reference requests for relevant mortgage brokers.

Table 2 gives an overview of the questions asked in the template reference requests and gives general guidance on interpreting and answering the questions.

To assist licensees, we have prepared:

• an example of a completed template reference request for a financial adviser (PDF 389 KB), and
• an example of a completed template reference request for a mortgage broker (PDF 125 KB).

Note: These are examples of completed template reference requests under the 2021 protocol that have been annotated to help licensees understand the requirements of the protocol. Although these examples are for the 2021 protocol, they provide general examples of the types of information a licensee might provide in response to a template reference request under either the 2021 protocol or ASIC protocol. As the referee licensee, you will need to make sure to answer the questions in the template reference request provided to you.

Table 2: Overview of template reference requests in Schedules 3 and 5 to the ASIC protocol

Related obligations

Your other obligations as a recruiting licensee or referee licensee are set out in sections 9–13 of the ASIC protocol.

Agents acting on behalf of licensees

You may authorise an agent to collect, use, disclose and store personal information on your behalf in relation to a prospective representative or relevant mortgage broker for the purposes of reference checking and information sharing in accordance with the ASIC protocol.

In these circumstances, you are responsible for the acts or omissions of your agent in relation to the ASIC protocol.

Use of information

Information that you collect about an individual under the ASIC protocol must only be collected, used, disclosed or stored for the purpose of considering a prospective representative’s suitability for employment or authorisation, or considering whether to act as intermediary to a relevant mortgage broker, in relation to:

• complying with the ASIC protocol, and
• in the case of a recruiting licensee – complying with the general conduct obligations of a licensee, which include taking steps to ensure that a licensee’s representatives comply with financial services laws or credit legislation and ensuring that representatives are adequately trained and competent to provide financial services or credit activities.

Information must not be collected, used, disclosed or stored for a purpose other than that for which it was collected – unless the prospective representative or relevant mortgage broker has consented to that use or disclosure, or another exception under the Privacy Act applies.

No arrangements or agreements

You must not enter into any arrangements or agreements with any individual that limit your ability to collect, use, disclose and store information under the ASIC protocol.

Contact for reference checking and information sharing

You must have adequate arrangements in place for licensees to identify how to contact you for reference checking and information sharing purposes.

You may wish to make this information publicly available on your website. If you do not have a website, you will need to have other arrangements to ensure that licensees can readily identify how to contact you.

For example, this could be through standard arrangements when someone phones your principal public contact number or through your industry association.

Record keeping

You must keep accurate and complete written records for 5 years demonstrating your compliance with the ASIC protocol. The types of records you must keep include:

• consents given, requested, refused, withdrawn or ceased
• references given, received or requested, including records of attempts to request a reference and extensions agreed to by referee licensees
• requests to clarify or update information contained in a reference and responses to these requests
• agreements with agents relating to the ASIC protocol
• policies and processes for handling personal information, and
• complaints received about the reference checking process.

Keeping these records will help you comply with the ASIC protocol. ASIC will also be able to monitor whether you are undertaking reference checking in a timely, efficient and compliant manner.

Providing copies of references

The ASIC protocol does not require a licensee requesting a reference or a referee licensee to give a prospective representative or relevant mortgage broker a copy of a reference. However, a prospective representative or relevant individual may be able to obtain a copy of a reference given under the ASIC protocol under APP 12: see APP guidelines, Chapter 12 (July 2019). In certain circumstances, the handling of records relating to current and former employment relationships is exempt from the Australian Privacy Principles under the employee records exemption.

A referee licensee may voluntarily provide a prospective representative or relevant mortgage broker with a copy of a reference they have given to a licensee under the ASIC protocol.

What happens if I don’t comply?

ASIC can take enforcement action against you if you contravene your obligation to comply with the ASIC protocol (e.g. if you fail to take reasonable steps to obtain a reference as a recruiting licensee or to give a written reference to a licensee as a referee licensee).

A civil penalty applies for non-compliance with the ASIC protocol. We may also take administrative action if you do not comply with the ASIC protocol, which could include suspending or cancelling your licence or imposing additional licence conditions.

Note: See Information Sheet 151 ASIC’s approach to enforcement (INFO 151) explaining how we approach our enforcement role and Fines and penalties on the ASIC website for information about penalties, including the value of a penalty unit.

What action can a prospective representative or relevant mortgage broker take?

Where a prospective representative or relevant mortgage broker considers that a referee licensee has not acted in accordance with the ASIC protocol, they may:

• directly approach a referee licensee to seek to resolve their concern
• make a complaint to ASIC about a suspected breach of the ASIC protocol, and/or
• make a complaint to the Office of the Australian Information Commissioner for disputes about personal information held by an APP entity.

Relief from requirements of the protocol

ASIC has the power to grant exemptions and modifications from requirements of Part 7.6 (other than Divisions 4 and 8) of the Corporations Act and Chapter 2 of the National Credit Act, including the obligations in respect of the ASIC protocol: see section 926A of the Corporations Act and section 109 of the National Credit Act.

In limited circumstances, ASIC has granted relief to licensees from some requirements of the ASIC protocol to share information about current or prospective representatives of a licensee that is a wholly-owned subsidiary (within the meaning of section 9 of the Corporations Act).

For information on how to apply for relief, see Regulatory Guide 51 Applications for relief (RG 51) and Regulatory Guide 167 AFS licensing: Discretionary powers (RG 167).

Checklists

Table 3 and Table 4 are checklists of questions you should ask yourself when requesting a reference or receiving a request for a reference under the ASIC protocol.

The checklists prompt you to take certain steps to help you comply with your reference checking and information sharing obligations – they do not provide a complete list of the obligations that apply to licensees under the ASIC protocol.

Table 3: Checklist for licensees requesting a reference

Table 4: Checklist for referee licensees

Where can I get more information?

• ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429 (2021 protocol)
• ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 (ASIC protocol)
  • Template consent forms in Schedule 1 and Schedule 2 to the ASIC protocol
  • Template reference requests in Schedules 3, 4 and 5 to the ASIC protocol
• Example template reference request: Reference for a financial adviser (PDF 389 KB)
• Example template reference request: Reference for a mortgage broker (PDF 125 KB)
• RG 51 Applications for relief
• RG 104 AFS licensing: Meeting the general obligations
• RG 167 AFS licensing: Discretionary powers
• RG 205 Credit licensing: General conduct obligations
• INFO 151 ASIC’s approach to enforcement
• Standards Australia handbook
• Consent to the handling of personal information, APP 5 – Notification of the collection of personal information and APP 12 – Access to personal information, and Employee records exemption on the website of the Office of the Australian Information Commissioner
• Reference checking directory for the financial services industry
• Contact us online.