Connective sends ACL holders a survey to satisfy itself and our lender partners that you, and the brokers operating under your Australian Credit Licence, are compliant in accordance with their general conduct obligations (RG205).

ASIC requirements – what we already know

As an ACL holder, you must ensure that your representatives act within the scope of what you have authorised them to do. This includes monitoring and supervision of the loans submitted under your credit licence. ASIC does not expect you to scrutinise all the actions of your representatives, but you do need to have measures in place that evidence that your representatives are complying with credit legislation, and that those responsible for overseeing compliance within your business are independent enough to complete these requirements properly.

Lender requests – What Connective is being asked

Lenders are reaching out to all aggregators to gain a level of reassurance that our members (including those who operate under their own licence) are compliant.

In our survey, we are asking all Australian Credit Licence holders to provide high level information on the file reviews that are being undertaken within their broking business.

High level information requested for each loan writer includes:

· who reviews each broker’s loan files

· how many loan files are reviewed a year

· when the last review was conducted

Note: Unless specifically requested by a lender or regulator, we will not be requesting any actual loan files or to see the audit or review results.

What if I do not provide this information?

If you do not provide this information to Connective, we are unable to provide this information to the lenders who request it.

Lenders have reinforced that this information is required to ensure that brokers submitting loan applications to them are operating in compliance with legislation.

If lenders cannot obtain this assurance, they may reconsider your accreditation status at individual and business level.

What options do ACL holders have?

· Provide Connective with the requested information in relation to file reviews completed within the business.

· Become a Connective credit representative under Connective’s licence and let us manage your compliance.

· Start the process now of getting independent file audits completed –leveraging our ACL compliance program or other independent audit providers.

What is considered an independent file review?

· A documented file audit that assesses a broker’s compliance and supporting documentation against their regulatory requirements including a mechanism for remedying any compliance breaches. Note: a compliance checklist would not be sufficient.

· Minimum of 3 loan files per active broker per annum. If a broker is rated as “high risk”, reasonable practice would be to conduct additional file reviews within a shorter period.

· The review should be completed by an independent third party or someone within the business such as a compliance manager. Reviews completed by another broker within the business, or an admin (limited qualifications, experience or authority) will not be acceptable.

If you have any questions about the survey or implementing an audit system, please contact [email protected].