26 Apr 2012

ASIC conducting checks on annual compliance certificates

Australian Credit licensees must have adequate documentation and systems to show they are complying with their obligations under the National Consumer Credit Protection Act.

Holders of an Australian Credit Licence may be getting a visit from ASIC between April and 30 June this year. ASIC has announced it intends to conduct a compliance check on the information that licensees have provided in their Annual Compliance Certificates.

Licensees are required to submit an Annual Compliance Certificate no later than 45 days after the anniversary that their licence was first issued. ASIC’s announcement shows that licensees must have adequate documentation and systems to show they are complying with their obligations under the National Consumer Credit Protection Act (NCCP Act)

As ASIC Commissioner Greg Tanzer commented, the Certificate information "is critical to ensure those activities are conducted appropriately and that there are relevant processes and programs in place to identify non-compliance".

What information does a licence-holder have to provide?

Australian Credit Licence-holders are required to do the following in their Annual Compliance Certificate:

  • update details about the licensee's business activities, credit or credit intermediary activities and representatives for the previous 12 months;
  • if the licence holder provides credit services, it should provide information about the money held, the number of complaints received and the number of voluntary, proactive compensation programs it runs;
  • certify that the licensee is complying with its credit licence obligations;
  • certify matters and notify changes about all of the licensee's fit and proper people, both current and those that have ceased to perform that role in the past 12 months – or provide details of any exceptions;
  • complete a statement of personal information for all new fit and proper people; and
  • notify changes regarding responsible managers.

It is important that licence-holders show they have practices, procedures and systems in place demonstrating they are acting in accordance with their obligations under the NCCP Act. Not only should licensees have an NCCP Plan, but they will also need to demonstrate that the Plan has been implemented and is being followed.

Recommendations for licence-holders

To ensure you are prepared for an ASIC visit, some useful steps which can be taken before lodging your Annual Compliance Certificate are:

  • review your NCCP Plan for business and regulatory currency;
  • ensure complaints are being regularly monitored and analysed and there is regular reporting on complaints;
  • check with Responsible Managers on their compliance activities, including that they are documenting steps taken to comply with credit obligations; and
  • review Responsible Manager competency requirements and ensure that all training is up-to-date and documented.

Merely signing off on your Annual Compliance Certificate without undertaking some of these basic steps (amongst others) could come at a high cost to licensees. The National Governance and Compliance Division of Clayton Utz can assist you with preparing for submission of your Annual Compliance Certificates such as by facilitating a health check or mock audit of your organisation's compliance.

Thanks to Mark Teys for his help in writing this article.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.