Explanatory Statement
ASIC Credit (Amendment) Instrument 2024/20
This is the Explanatory Statement for ASIC Credit (Amendment) Instrument 2024/20.
The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).
Summary
- ASIC Credit (Amendment) Instrument 2024/20 (the Instrument) amends ASIC Credit (Electronic Precontractual Disclosure) Instrument 2020/835 (the Principal Instrument) to repeal the instrument from 1 April 2024.
Purpose of the instrument
2. The Principal Instrument allows credit licensees and representatives to give pre-contractual disclosure to consumers in the same electronic manner that applies to other credit disclosure documents.
3. The Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023 provided for the making of Regulations to specify the ways in which a credit provider may give a document. The accompanying Regulations, which give effect to the exemptions and modifications of the law currently in the Principal Instrument, were made on 13 December 2023 as the Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023. These Regulations commence on 1 April 2024.
4. The purpose of the Instrument is to cease the operation of the Principal Instrument from 1 April 2024 in line with the commencement of the Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023.
Consultation
5. As this is a technical amendment to cease the operation of the Principal Instrument in line with recent changes to the Act, ASIC has not consulted publicly.
Operation of the instrument
6. Item 1 of Schedule 1 amends the Principal Instrument to repeal it from 1 April 2024.
7. The Instrument commences on the day after it is registered on the Federal Register of Legislation.
Legislative instrument and primary legislation
8. The subject matter and policy implemented by the Instrument is more appropriate for a legislative instrument rather than primary legislation because it effectively ceases the operation of the Principal Instrument which is itself a legislative instrument.
Legislative authority
9. The Instrument is made under paragraph 163(3)(d) of the National Consumer Credit Protection Act 2009 (the Credit Act) and subsection 203A(3) of the National Credit Code (the Code).
10. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
11. The Instrument is a disallowable legislative instrument.
Statement of Compatibility with Human Rights
12. The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.
Attachment
Statement of Compatibility with Human Rights
This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
ASIC Credit (Amendment) Instrument 2024/20
Overview
1. ASIC Credit (Amendment) Instrument 2024/20 amends ASIC Credit (Electronic Precontractual Disclosure) Instrument 2020/835 to repeal it from 1 April 2024.
Assessment of human rights implications
2. This instrument does not engage any of the applicable rights or freedoms.
Conclusion
3. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
The ASIC Credit (Amendment) Instrument 2024/20 was enacted to amend the ASIC Credit (Electronic Precontractual Disclosure) Instrument 2020/835. This amendment was introduced to repeal the Principal Instrument from 1 April 2024, aligning with the commencement of the Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023. The purpose of this legislative instrument was to update the regulatory framework for pre-contractual disclosure by credit licensees and representatives, ensuring it reflects current legislative requirements. The Instrument was made under the authority of the National Consumer Credit Protection Act 2009 and the National Credit Code, and it is a disallowable legislative instrument. The amendment was approved by the Australian Securities and Investments Commission (ASIC) and does not engage any of the applicable rights or freedoms, thereby remaining compatible with human rights as per the Human Rights (Parliamentary Scrutiny) Act 2011.
Scope and Application
ASIC Credit (Amendment) Instrument 2024/20 applies to credit licensees and representatives within the meaning of the National Consumer Credit Protection Act 2009 and the National Credit Code. These entities are responsible for providing credit-related services and must comply with the regulatory framework governing the industry. The Instrument operates at the Commonwealth level, given that the amending Act, the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023, is a federal statute. The Instrument's primary purpose is to align the Principal Instrument with the new regulations by repealing it, effective from 1 April 2024. There are no stated exclusions or exemptions within the scope of this Instrument. The application of the Instrument is further extended and defined through subordinate instruments, such as the Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023, which provide the detailed specifications for credit disclosure methods.
Key Provisions
The ASIC Credit (Amendment) Instrument 2024/20 amends the ASIC Credit (Electronic Precontractual Disclosure) Instrument 2020/835, primarily through its repeal from 1 April 2024, as detailed in Item 1 of Schedule 1. This amendment is necessitated by the recent legislative changes under the Treasury Laws Amendment (2023 Law Improvement Package No. 1) Act 2023, which introduced new regulations governing the ways in which credit providers may give documents. The accompanying Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023, made on 13 December 2023, provide for these changes and commence on 1 April 2024, aligning with the repeal of the Principal Instrument.
The amended legislation imposes specific obligations on credit licensees and representatives, stipulating that pre-contractual disclosures to consumers must be provided in the same electronic manner as other credit disclosure documents. This requirement is intended to ensure consistency and clarity in the disclosure process, enhancing consumer protection by ensuring that important information is delivered in a standardised format. The obligations also encompass compliance with the new regulations specified in the Treasury Laws Amendment (Precontractual Disclosure and Other Measures) Regulations 2023, which detail the acceptable methods for delivering these disclosures electronically.
In terms of penalties and consequences, the ASIC Credit (Amendment) Instrument 2024/20 itself does not detail specific offences or penalties for non-compliance with the repealed instrument. However, the overarching framework under the National Consumer Credit Protection Act 2009 and the National Credit Code, which the Instrument is made under, includes provisions for enforcement and penalties. Non-compliance with credit disclosure requirements can result in civil penalties, with maximum fines potentially reaching up to $1.1 million for individuals and $5.5 million for bodies corporate, as stipulated in the Credit Act. Additionally, criminal penalties may apply in certain circumstances, with maximum penalties including imprisonment for up to 5 years for serious breaches. These penalties are intended to deter non-compliance and ensure adherence to the regulatory standards governing credit disclosures.