What is an Australian Credit License?
An Australian credit licence (ACL) is a licence issued by the Australian Securities and Investments Commission (ASIC) that permits individuals or companies to engage in credit activities in Australia.
Do I need an Australian Credit Licence?
If you engage in credit activities, you will generally need to have an ACL or become an authorised credit representative of a licence holder.
The types of authorisations under an ACL normally comprise:
- Credit Provider: being a direct lender under credit contracts or acting as a lessor under a consumer lease.
- Credit Assistance: assisting consumers in entering into a credit contract or consumer lease (e.g. brokers, mortgage managers or aggregators and other intermediaries who manage a credit contract on behalf of a credit provider).
- Debt Management: providing debt management assistance and/or credit reporting assistance.
Credit Representative
Without an ACL, you may act as a credit representative in order to carry out certain credit activities.
A credit representative does not hold its own ACL but operates under another ACL holder’s licence. The ACL holder remains fully responsible for the representative’s conduct.
As an example, providing mortgage broking services is a credit activity and requires an ACL. Most mortgage brokers operate under their aggregator’s licence as a credit representative, particularly where they may not yet have the required skills, systems or resources required to apply for and hold their own credit licence. Being a credit representative also has lower ongoing administrative costs and compliance requirements. The licence holder (i.e. aggregator) will be responsible for having a compliance program and ensuring compliance by its representatives.
Mortgage brokers with sufficient skills and resources can consider obtaining their own ACL to expand the scope of their business. It will enable them to access lenders outside the aggregator’s panel, issue documents under their own letterhead, and potentially provide credit directly.
How do I obtain an Australian Credit Licence?
To obtain an ACL, ASIC needs to see that your business has adequate financial resources, can operate responsibly and can meet all compliance obligations. This includes having appropriate qualifications, memberships, insurance, and experienced responsible managers. You must also prepare proof documents explaining how your business works, how you manage risk, and how you will meet regulatory requirements.
ASIC reviews the application in stages and will often request clarification or additional information. Once all requirements are satisfied, the licence is granted.
At the initial stage of preparing your application, you should also seek corporate legal advice to ensure that the ACL will be held by an appropriate entity with a suitable corporate structure.
What are the Ongoing Responsibilities under an ACL?
Once the licence is granted, an ACL holder is subject to ongoing compliance obligations. These obligations include maintaining a compliance program, establishing a compliance committee, developing compliance policies & procedures, establishing registers and checklists, having regular meetings, diarising key dates and meeting strict reporting obligations.
Breach of ongoing compliance obligations may result in cancellation of the licence and significant penalties.
How We Can Help
As a law firm experienced in ACL relatedmatters, we support both new applicants and existing license holders.
For new applicants, we provide end-to-end legal assistance guiding you through each stage of the process to ensure a smooth and efficient application. We assess whether you require an ACL, advise on the correct authorisations, assist with preparing legal documents, lodge the application on your behalf and manage all correspondence and requisitions from ASIC to keep the process moving smoothly.
For existing ACL holders, we help you meeting your ongoing legal and regulatory obligations. Our services include developing or reviewing your compliance program, drafting policy documents and providing other ongoing support.
If you require assistance with obtaining an ACL or meeting your ongoing compliance obligations, our experienced team is here to help.
How can I learn more?
David Wang.
Special Counsel.
In corporate transactions, cross border investments, and business cooperations, clients often face complex contracts, intricate processes, and uncertain risks. David understands these challenges and anxieties. With keen commercial insight and extensive experience, he helps clients clarify issues, develop strategies, and drive transactions forward smoothly.
David specialises in commercial contract drafting （including lease agreements）, commercial negotiations, establishment of business and compliance, mergers and restructuring, cross border investments, and intellectual property, and assists with Australian financial services licence and Australian credit licence matters. He guides clients from uncertainty and confusion to clarity and confidence—providing not just legal advice, but acting as a reliable partner in achieving their business objectives.
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