ASIC Credit (Flexible Credit Cost Arrangements) Instrument 2017/780 (Cth)

ASIC Credit (Flexible Credit Cost Arrangements) Instrument 2017/780

About this compilation

Compilation No. 1

This is a compilation of ASIC Credit (Flexible Credit Cost Arrangements) Instrument 2017/780 as in force on 3 October 2018. It includes any commenced amendment affecting the legislative instrument to that date.

This compilation was prepared by the Australian Securities and Investments Commission.

The notes at the end of this compilation (the endnotes) include information about amending instruments and the amendment history of each amended provision.

Contents

Part 1—Preliminary 1 Name of legislative instrument 2 Commencement 3 Authority 4 Definitions Part 2—Declaration 5 Modification to prohibit the provision of flex-commissions Part 3—Transitional 6 Application Endnotes Endnote 1—Instrument history Endnote 2—Amendment history

Part 1—Preliminary

1 Name of legislative instrument This is the ASIC Credit (Flexible Credit Cost Arrangements) Instrument 2017/780.

2 Commencement This instrument commences on 1 November 2018.

3 Authority This instrument is made under paragraph 109(3)(d) of the National Consumer Credit Protection Act 2009.

4 Definitions In this instrument: Act means the National Consumer Credit Protection Act 2009. exempt special purpose funding entity has the same meaning as in regulation 3 of the National Consumer Credit Protection Regulations 2010.

Part 2—Declaration

5 Modification to prohibit the provision of flex-commissions The provisions to which Part 2-6 of the Act applies apply in relation to a licensee and an exempt special purpose funding entity as if: (a) subsection 5(1) of the Act were modified or varied by inserting the following definitions in the appropriate alphabetical position: "annual percentage rate has the meaning given by section 204 of the National Credit Code."; "associated person means, in relation to a person (primary person), a person who is: (a) an associate of the primary person for the purposes of Division 2 of Part 1.2 of the Corporations Act 2001; or (b) an officer, agent or employee of the primary person, or of a person referred to in paragraph (a)."; "consumer lease fees or charges has the meaning given by section 204 of the National Credit Code."; "credit fees and charges has the meaning given by section 204 of the National Credit Code."; "determines, proposes or influences, when used in relation to a person determining, proposing or influencing the amount of an annual percentage rate or a rental charge in relation to a credit contract or a consumer lease does not include the person: (a) merely proposing or influencing: (i) in the case of a credit contract that is provided for the purposes of purchasing goods—the type or identity of the goods to be purchased; or (ii) in the case of a consumer lease—the type or identity of the goods to be rented under the consumer lease; or (b) merely providing the credit provider or lessor with information about any of the following: (i) the requirements and objectives of the debtor or lessee in relation to the credit contract or consumer lease; (ii) the financial situation of the debtor or lessee; or (c) merely providing the credit provider or lessor with other factual information provided by, or about, the debtor or lessee; or (d) determining, proposing or influencing the amount of the annual percentage rate or rental charge (as the case may be) before the first to occur of: (i) any contact between the debtor or lessee and the person or an associated person in relation to the credit contract or consumer lease; (ii) any information in relation to the debtor or lessee being provided to the person or an associated person in relation to the credit contract or consumer lease. Note: For example, paragraph (d) would apply to a person who merely influenced the annual percentage rate proposed to apply under a class of potential future credit contracts before any contact with, or the provision of information in relation to, the debtor."; "exempt special purpose funding entity has the meaning given by regulation 3 of the National Consumer Credit Protection Regulations 2010."; "flexible credit cost arrangement in relation to a credit contract or consumer lease means a contract, arrangement or understanding (other than a servicing agreement or a management agreement) between a licensee or an exempt special purpose funding entity and another person (introducer): (a) for the introducer or an associated person to provide credit services in relation to the credit contract or consumer lease; and (b) under which the introducer or an associated person can determine, propose or influence: (i) in the case of a credit contract—the annual percentage rate under the contract; or (ii) in the case of a consumer lease—the rental charge for the lease. Note 1: See the definition of determines, proposes or influences for various circumstances that do not amount to determining, proposing or influencing the amount of the annual percentage rate or rental charge. Note 2: The definition of servicing agreement is notionally inserted into this subsection by subregulation 25G (1) and item 3.4 of Schedule 3 of the National Consumer Credit Protection Regulations 2010."; "home loan means a credit contract under which a licensee or an exempt special purpose funding entity provides credit wholly or predominantly: (a) to purchase, renovate or improve residential property; or (b) to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property."; "introducer in relation to a flexible credit cost arrangement entered into by a licensee or an exempt special purpose funding entity means the person who has entered into the arrangement with the licensee or funding entity."; "linked supplier: (a) of a credit provider, means a supplier of goods or services in relation to whom the credit provider is a linked credit provider (within the meaning of subsection 127(1) of the National Credit Code); and (b) of a lessor, means a supplier of goods in relation to whom the lessor is a linked lessor (within the meaning of subsection 179S(1) of the National Credit Code)."; "management agreement means a written agreement that is: (a) entered into by a mortgage manager (as defined in in regulation 26 of the National Consumer Credit Protection Regulations 2010) and by a credit provider or lessor; and (b) an agreement of the type specified in the definition of mortgage manager in regulation 26 of the National Consumer Credit Protection Regulations 2010.". "regulated person: see subsection 53A(1)."; "rental charge has the meaning given by subparagraph 53A(2)(c)(ii)."; and (b) Chapter 2 of the Act were modified or varied by, after section 53 of the Act, inserting: