Credit representative obligations: what sits with you, what sits with your licensee

How the authorisation works

Section 29 of the NCCP Act prohibits engaging in a credit activity without a licence. A credit representative is not licensed. They rely on the defence in s 29(3): they act on behalf of a principal who holds a licence covering that activity, and their conduct is within the principal's authority. Step outside the authorisation and the defence falls away.

• Section 64: a licensee may give a person a written notice authorising them to engage in specified credit activities on its behalf. The activities can be some or all of those the licence covers.
• Section 65: a body corporate that is a credit representative may sub-authorise natural persons, but only with the licensee's written consent. This is the common structure for a brokerage company whose individual brokers are sub-authorised under the aggregator's licence.
• Section 64(5): an authorisation has no effect to the extent it covers activities outside the licence, a person under a banning order, a person who is not an AFCA member (other than for low cost credit contracts), or a person convicted of serious fraud in the last 10 years, among other things.
• Section 66: one person can be a credit representative of two or more licensees only if each consents or they are related bodies corporate.
• Section 67: a person cannot be authorised as a credit representative for an activity their own licence already covers.
• Section 71: the person who gives the authorisation must lodge notice with ASIC within 15 business days, and notify changes or revocation within 10 business days. ASIC then allocates a credit representative number (s 72).

Credit rep vs credit licensee: who carries what

The licensee's general conduct obligations (s 47)

Section 47(1) is the licensee's core duty list. The parts that matter most for how a rep's files are kept are:

• s 47(1)(a): do all things necessary to ensure the credit activities authorised by the licence are engaged in efficiently, honestly and fairly.
• s 47(1)(b): have adequate arrangements to ensure clients are not disadvantaged by conflicts of interest arising in credit activities of the licensee or its representatives.
• s 47(1)(e): take reasonable steps to ensure its representatives comply with the credit legislation.
• s 47(1)(g): ensure its representatives are adequately trained, and are competent, to engage in the authorised credit activities.
• s 47(1)(k): have adequate arrangements and systems to ensure compliance with its s 47 obligations, and a written plan that documents them.
• s 47(1)(l): unless APRA-regulated, have adequate resources (including technological resources) to carry out supervisory arrangements, and adequate risk management systems.

Section 47(2) says adequacy is judged against the nature, scale and complexity of the licensee's credit activities. ASIC's guidance on these obligations is in RG 205 (general conduct obligations) and RG 206 (competence and training). The best interests duty has its own supervision provisions: s 158LE(2) and s 158LF(2) require the licensee to take reasonable steps to ensure its credit reps comply with the duty and the conflict priority rule.

Best interests duty applies to both

Part 3-5A splits the best interests obligations into two sets. Subdivision A (ss 158L to 158LB) applies to licensees that are mortgage brokers, but not to credit assistance provided by a credit representative acting within their authority (s 158L(2)). Subdivision B (ss 158LE and 158LF) applies to credit representatives. Under s 158LD, Subdivision B applies to credit assistance a rep provides within their actual or apparent authority where either the rep or the licensee is a mortgage broker, as defined in s 15B. So a broker working under an aggregator's licence owes the duty personally, and the aggregator owes a separate duty to take reasonable steps to make sure they meet it. Both are civil penalty provisions.

ASIC's RG 273 is the guide on the duty. It says evidence of compliance will come predominantly from the broker's own records (RG 273.21) and sets out what those records generally include at RG 273.165. We have written up that detail in best interests duty file notes for mortgage brokers.

Who is responsible for the file

Three different questions tend to get mixed up here.

1. Who has to produce the assessment? The responsible lending obligations in Part 3-1 are the licensee's. Section 120 requires the licensee to give a consumer a written copy of the preliminary assessment on request for up to 7 years. The licensee can only do that if the rep's file is complete and retrievable.
2. Who answers to the client? Under s 75, a licensee with a rep who represents only that licensee is responsible to the client for the rep's conduct, whether or not the conduct was within its authority. Under s 78 the client has the same remedies against the licensee as against the rep, and they are jointly and severally liable. The rep is not relieved of their own liability (s 78(4)), and s 78(6)(a) allows an agreement under which the rep indemnifies the licensee, which is why aggregator agreements usually contain one.
3. Who owns and keeps the records? The Act does not settle that on its own. Your agreement with the aggregator will usually say where records must be stored, how long, and that the licensee can access them. Read it. Our guide on how long to keep file notes covers the retention periods.

The licensee is legally on the hook for your files, so it will check them.

How licensee and aggregator file reviews work in practice

File reviews are how a licensee turns s 47(1)(e) and s 158LE(2) into something it can show ASIC. The detail varies by aggregator, but the pattern is similar: the licensee samples a rep's settled or submitted loans, checks the file has the required documents in the right order, and reads the notes to see whether the requirements and objectives, the verification and the BID reasoning hang together.

What reviewers look for in the notes is consistency. The credit guide, quote, preliminary assessment and credit proposal disclosure are mostly generated by the aggregator's platform. The part that depends on the broker is the file note: what the client said they needed, what you checked, what you considered and why you recommended what you did. Our mortgage broker compliance audit checklist lists what a reviewer checks, and the free NCCP file note compliance checklist lets you test a note against it.

Keeping notes consistent across a 3 to 10 broker team

In a small brokerage, each broker is usually a credit rep in their own right (directly under s 64 or sub-authorised under s 65), with their own credit rep number and their own best interests duty. The principal is often not the licensee, but the principal's name is on the business, and one broker's thin notes reflect on the whole office.

The fixes that work are unglamorous:

• One shared note template. Same headings for every broker: requirements and objectives, financial situation and verification, options considered, recommendation and why, conflicts, client decision, next steps. Our mortgage broker file note template is a starting point.
• Plain wording everyone shares. Write notes that anyone in the team could pick up cold: full words, full dates, and the same term for the same thing every time (owner-occupied, interest only, loan-to-value ratio). A reviewer, or the next broker on the file, can then read any note.
• The principal sees every note. If the principal only sees notes when a file is pulled for review, problems surface too late. Regular reading of the team's notes is the in-house version of what the licensee does.
• Notes written the same day. RG 273.169 says contemporaneous notes help capture your thinking at each point. A note reconstructed at settlement reads that way.
• Locked once final. A note that can be quietly edited after a complaint lands is weaker evidence. Amendments should be added, not overwritten.
• One place to find them. When a broker leaves, the next one needs the history.

This is where CallNote Team fits. Every broker uses the same templates, including one built from a note your best broker already writes. Owners and admins see every note in the team, and brokers see their own. CallNote works from a call transcript you already have, pasted, uploaded, forwarded by email, or automatically from Dialpad or Aircall, and never records the call itself. A published note is sealed with a checksum and amendments are append-only. It costs $99 per seat per month (AUD). It does not integrate natively with aggregator platforms like Mercury or Salestrekker, so notes go onto the loan file by copy and paste, PDF, or Zapier where your system supports it. See CallNote for mortgage brokers or our comparison of file note software for mortgage brokers.

Credit representative file note checklist

1. Your name and credit rep number match the credit guide you gave (s 158(2)(d)).
2. The credit activity you performed is within your written authorisation (s 29(3), s 64).
3. Date, time, who was on the call, and how contact was made.
4. Requirements and objectives in the client's own words, with priorities ranked.
5. Financial situation, what you verified and how.
6. Options considered, the shortlist presented and cost comparison.
7. The recommendation and why it is in this client's best interests relative to the others (s 158LE, RG 273.165).
8. Any conflict of interest and how the client's interests were prioritised, or a line that none was identified (s 158LF).
9. What you explained and the client's decision, especially if they went against your recommendation.
10. Next steps and who owns them.
11. Written on the day, in the team template, stored where the licensee can retrieve it for 7 years.

Worked example: a credit rep's file note

Fictional clients. The broker is a credit representative sub-authorised by the brokerage company under an aggregator's licence.

The rep is identified, the priorities are specific, the parental leave risk was tested, alternatives have reasons, and the recommendation ties back to the client's words. That is what s 158LE and RG 273 expect to see.

Common questions