May 24, 2016 at 3:07 pm #4781
What happens if a Credit Rep becomes Bankrupt.
Bankruptcy is a result of failed Property Development.
Will ASIC allow them to continue as a Mortgage Broker and are their any restrictions placed on them.May 26, 2016 at 5:15 pm #4783
In this answer a ‘Credit Representative” is a person who is authorised in writing by the licensee to engage in credit activities on its behalf, rather than a director or employee of the Licensee. Bankruptcy does not automatically prohibit an individual from acting as a credit representative.
- the Credit Licensee has an obligation under s 47 of the National Consumer Credit Protection Act 2009 to ensure that its representatives are trained and are competent to engage in the credit activities authorised by the licence. Depending on the circumstances a Licensee may consider whether the bankruptcy alters its view of the credit representative’s competence; and
- If the Credit Representative is involved in managing a corporation, bankruptcy would automatically disqualify them from doing so. This is as a result of s 206B(3) of the Corporations Act, rather than because of the Credit laws. They could still be a credit representative but would not be allowed to be managing their corporation.
In the case of the Licensee’s fit and proper people (who may be directors, officer, senior managers) of the Licensee, there could well be implications of bankruptcy. This could arise from the automatic disqualification from managing a corporation referred to above, and/or because they may be nominated as Responsible Managers but would no longer be considered fit and proper by ASIC for that role.
Please feel free to contact our Financial Services Team if you require further information or more detailed advice.
Author: Grant Holley
Co-contributor: Tamara Cherny
Keep an eye out for the launch of our new Sydney office on Martin Place in July 2016!! We are very excited about this opportunity to service our Sydney clients.