QED Risk Services, providers of QED CompliFast, has long been of the view that the finance broking industry’s understanding of “compliance” is limited to its NCCP obligations and, more specifically, to the responsible lending obligations. This is perfectly illustrated by the fact that almost 100% of the industry refers to the NCCP disclosure documents (Credit Guide etc) as “my compliance documents”.
Even without branching out into the other laws that a broker needs to comply with, or the other obligations that they need to comply with such as broker/aggregator/lender agreements, there are so many areas of the National Consumer Credit Protection Act that go way beyond the responsible lending obligations. Most of these are tied up in section 47 of the Act – the General Conduct Obligations.
In 2013, ASIC increased its campaign in ensuring ACL holders understand and are complying with their obligations under the general conduct obligations and we are starting to see the first bans on Licensees for breaching these obligations. The obligations include:
Compliance management systems
- Risk management systems
- Supervision and training arrangements
- Business resource planning (including human, financial and technology resources)
- Compensation arrangements
- Complaint management systems
- Managing conflicts of interest
- Outsourcing arrangements
A true compliance system, which is required for NCCP compliance, is one that:
1. Documents how the business will meet its obligations (policies)
2. Schedules testing that assess how the business is performing against its policy requirements
3. Documents the results of the testing when it is performed
4. Details how the business will return itself to a state of full compliance in the areas where the documented testing shows shortcomings
EVEN if you are a sole trader, the condition of your Australian Credit Licence is that you must have policies and you must test yourself against those policies (in the areas listed below), even if you think they don’t apply to you - they do!
The easy solution for NCCP Compliance
QED CompliFast is a quarterly compliance program – it monitors different areas of your business each quarter, so it’s not overwhelming!
QED CompliFast is fast and easy to use with just 4 simple steps:
1. Education: Just download and read your quarterly information pack.
2. Assessment: Complete your quarterly questionnaire as an overall assessment of your business.
3. Feedback: Read your professional and personalised report with recommended corrective action plans.
4. Easy Access: We keep your reports safe and secure. Access your reports as anytime through your secure login - handy if ASIC audits your business!
ASIC Report 330 – What you need to know about managing your Credit Reps
You may be aware that ASIC released Report 330 in March 2012 detailing how it expects Licensees to manage their Credit Representatives. In essence, the expectation now is that Licensees must:
- have risk-based systems for monitoring the activities of their Credit Representatives
- be able to aggregate monitoring results to identify possible systemic issues
- augment risk-based in-office monitoring of Reps with other types of surveillance
- be able to identify “high-risk” transactions by Credit Representatives
- be able to produce a preliminary assessment document for every loan brokered
In addition, a Licensee must be able to ensure Reps are adhering to other elements of the general conduct obligations including information security, CPD training, complaints management, EDRS membership and PI currency as well as the Rep’s use of referral sources.
QED CompliFastReps is an extension of our industry-leading QED CompliFast, the only complete self audit tool available for Credit Licensees, which carries our 100% ASIC-free guarantee†.
Credit Reps are required to perform their own self-audit every three months covering all their NCCP obligations to their Licensee. These results are scored and the results are able to be viewed on YOUR QED CompliFastReps dashboard. This dashboard reporting allows you to view all your Credit Reps in one place and see at a glance where there are any particular trouble spots.
Sounds great? The answer to all your compliance concerns? With QED CompliFastReps you can save on time and wages to pay a staff member to do that testing and sufficiently document it, not to mention the travelling budget. Think of the time-saving (remember time is money) in freeing up your compliance staff to add further value and focus on the actual “problem” brokers, or even to know where to find the problem brokers!
To find out more please call us on 1300 817 662.