ASIC Credit (Charities) Instrument 2017/64

Overview

The ASIC Credit (Charities) Instrument 2017-64 was enacted in 2017 by the Australian Securities and Investments Commission (ASIC) under the National Consumer Credit Protection Act 2009. This legislation was introduced to address the gap left by the expiry of ASIC Class Order [CO 02/184], which previously provided conditional relief to charitable bodies from certain aspects of the financial services regulatory regime. With the replacement of [CO 02/184] by ASIC Corporations (Charitable Investment Fundraising) 2016/813, it became necessary to update the related regulations to align with the new terminology used in the Charities Act 2013. The primary objective of this instrument is to ensure that the licensing exemption for credit activities offered by charities remains clear and continues to operate effectively for both charities and consumers.

Scope and Application

The ASIC Credit (Charities) Instrument 2017-64 applies to the regulation of credit activities for charities, particularly those involved in raising funds to support charitable purposes through the issue of debentures or interests in a managed investment scheme. This instrument modifies the National Consumer Credit Protection Regulations 2010 to align the terminology used in the regulations with the Charities Act 2013. Specifically, it replaces references to ‘charitable bodies’ with ‘charity’ or ‘trustee of a charity’ to ensure consistency and clarity. This legislative instrument is applicable nationally and operates under the authority granted by the National Consumer Credit Protection Act 2009, ensuring that the exemption for specified credit activities offered as part of programs designed for low-income consumers continues to be effective. The instrument does not introduce new exclusions or exemptions but ensures that the existing framework remains clear and operationally consistent with current legal definitions and standards.

Key Provisions

The main operative sections of the ASIC Credit (Charities) Instrument 2017-64 involve modifications to the National Consumer Credit Protection Regulations 2010. Specifically, Section 5 of the instrument omits outdated terminology that referred to “charitable bodies” as defined by ASIC Class Order [CO 02/184], and replaces it with the term “charity” or “trustee of a charity” as defined in the Charities Act 2013. This change ensures that the regulatory framework remains aligned with current legislative definitions and continues to provide clarity for both charities and consumers. The instrument’s purpose is to maintain the effectiveness and clarity of the licensing exemption for credit activities offered as part of programs designed for low-income consumers, ensuring these activities remain within the bounds of the law. The obligations imposed by the ASIC Credit (Charities) Instrument 2017-64 primarily revolve around ensuring that the regulatory language used in the National Consumer Credit Protection Regulations 2010 is updated to reflect current legal terminology. This means that any entity or person offering credit services under the exemption must now comply with the definitions provided in the Charities Act 2013. This includes understanding who qualifies as a charity or a trustee of a charity for the purposes of the exemption. Additionally, it ensures that these entities provide clear and accurate information to consumers participating in credit programs designed for low-income individuals. Failure to comply with the provisions of the ASIC Credit (Charities) Instrument 2017-64 could result in significant consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of the National Consumer Credit Protection Act 2009 can lead to both civil and criminal liabilities. For instance, unauthorised credit activities could result in civil penalties, including fines. Additionally, individuals or entities found to be in breach of the Act could face criminal charges, which might lead to imprisonment. The exact penalties depend on the nature and severity of the breach, but they can include substantial fines and imprisonment terms as stipulated in the overarching legislation.