July 11, 2011 at 3:54 am #2373
If you are an Australian Credit Licensee, your Responsible Managers (RMs) are important because it is through these RMs that you demonstrate to ASIC that you have the competency to provide the credit services you are licensed to provide.
At all times you must maintain this competency. This obligation is set out in paragraph 47(1)(f) of the National Consumer Credit Protection Act 2009.
Check that you can still maintain competency
When an RM leaves your organisation, the first thing you need to turn your mind to from a licensing point of view is whether you can satisfy this obligation with your remaining RMs, or whether you need to nominate an additional RM with whom you can demonstrate the necessary competency with ASIC.
To refresh your memory in relation to your competence requirements, we suggest referring to ASIC’s Regulatory Guide 206 Credit licensing: Competence and training.
Check for a key person condition
The next important step is to look at the conditions of your ACL. Many ACLs have a “key person” condition, which identifies an RM who is considered to be of particular importance to the licensee. Look at your ACL to see whether a key person condition applies to the departing Responsible Manager.
As well as identifying key persons (if any), the condition sets out what you need to do. You will need to promptly notify ASIC of the departure of the RM, and apply to vary your ACL. This will require providing ASIC with information about the proposed RM, including supporting documentation such as a credit history check and criminal history report relating.
Information about varying your ACL can be found in ASIC’s Regulatory Guide 204, Applying for and varying a credit licence.
If the departing RM is not identified as a key person on the ACL, you do not need to notify ASIC immediately. However, you will need to notify ASIC at the time you are required to complete your annual compliance certificate.
Author: Sonnie Bailey