Reminder for margin lenders to upgrade licence
The Australian Securities and Investments Commission (ASIC) has issued a reminder to all margin lending providers that they need to have, or applied for, a margin lending authorisation by 30 June if they wish to continue providing margin lending services.
After 30 June all Australian Financial Services Licence (AFSL) holders who wish to provide margin lending products will need to obtain an AFSL or a variation to an existing licence so they comply with the Financial Modernisation Act, which defines margin lending facilities as a financial product.
From 1 January, 2011, issuers and advisers will be subject to new conduct and disclosure requirements introduced by the Modernisation Act, according to ASIC.
The Modernisation Act also imposes new responsible lending requirements on margin lending providers and clarifies responsibility for providing notification of margin calls, ASIC said.
ASIC will assess applications for margin lending facilities in the same way it does for other financial services as set out in RG 1-3, RG 105 and RG 166, the regulator said.
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