In their application for an ACL, Providers will need to demonstrate to ASIC that they can satisfy the General Conduct obligations applicable to an ACL holder once the licence is granted.

These obligations include having systems in place to ensure:

• Appropriate management of risks, conflicts and disputes;
• Adequacy of financial, technological and human resources which will in effect enable an efficient discharge of services; and
• Appropriate training arrangements for all staff so they can meet compliance with regulations as they perform their duties.

As it reviews applications, ASIC will have a keen focus on Providers’ organisational competence and whether they can run their business efficiently, honestly and fairly. In their application, Providers will need to satisfy ASIC that:

• People responsible for making significant decisions regarding the day to day running of the business have the necessary competence to do so in addition to having a problem-free past in similar roles.
• The relevant services will be provided in a timely and efficient manner, have tangible benefits and be tailored to the specific needs of the consumer. This stems from the significant level of vulnerability attached to consumers seeking debt management services.

Immediate focus required on ACL readiness

Providers, whether needing to apply for a new credit licence or vary an existing one, will need to immediately consider their readiness in making a successful ACL application. Their application will need to demonstrate the appropriate level of compliance maturity underpinned by a robust Compliance Framework that will engender fair consumer outcomes.

Providers also need to consider whether their existing pool of talent has the expertise to develop new or update their existing, Compliance and Risk Management Frameworks. Having adequate frameworks will enable appropriate management and mitigation of all relevant risks, especially the risk of non-compliance with the General Conduct obligations outlined above.

Key considerations for Providers in preparing their ACL application

To meet ASIC’s expectations, Providers need to consider the following key factors:

• Understand the regulatory requirements and framing the approach in applying for an ACL.
• Design, develop and review the overall Compliance and Risk Management Frameworks to demonstrate readiness for an ACL.
• Benchmark current state compliance maturity against the requirements of consumer credit regulatory regime to identify and resolve gaps.
• Uplift the control environment to proactively comply with ACL obligations. e.g. Having a robust monitoring and assurance framework to:
  • Ensure services are provided in line with ASIC’s General Conduct obligations; and
  • Clear Terms of Reference are defined to ensure people responsible for making significant business decisions comply with ASIC’s organisational competence requirements.
• Have the right capability and materials to train staff and ensure that they understand licensing obligations.
• Explore the use of technology such as Data and Voice Analytics to efficiently and accurately record communication, monitor compliance and exchange of data between consumers and the firm.

Long term focus required on consumer outcomes

To ensure business sustainability and additional value for stakeholders, internal and external, Providers’ regulatory change management programs should strive for long term positive consumer and commercial outcomes rather than just achieve the minimum required level of compliance in the short term.