What you should know about ASIC reference checking and information sharing protocol?

We all need good references to land a good job in any industry. ASIC – the regulator of the financial services industry has made it loud and clear that they’re a strong advocate for this. 

This week, ASIC has announced that from 1 October 2021, all Australian financial services licensees (AFSLs) and Australian credit licensees (ACLs) must comply with the ASIC Reference checking and information sharing protocol set out in ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429 (ASIC protocol).

If you’re pursuing a career in finance, chances are you are one of those driven workers who work hard to prove you deserve your place. When you’re looking for a career change, under the new protocol, your recruiters must seek your consent to request for a reference about you from your current or former employer in the past 5 years – who will be obligated to give honest and direct reference. 

​​This protocol sets out obligations that apply to AFSLs and ACLs. It’s intended to promote better information sharing about the performance history of prospective financial advisers and mortgage brokers. 

So if you are one of these licence holders or both, please read on:

• a credit licensee under the National Consumer Credit Protection Act 2009 (National Credit Act), and
• an Australian financial services (AFS) licensee under the Corporations Act 2001 (Corporations Act).

To whom it applies?

This protocol applies to you – the licensee, if you’re planning to recruit someone (a prospective representative) or if you have given a reference in the last 5 years. 

Who are considered ‘prospective representatives’?

To be clear: representatives in the industry are the individuals who haven't obtained their own licences and instead work under licence holders. Mortgage brokers often start their career as a Credit Representative typically through their Aggregator, aka, the intermediary between lenders and brokers. The licensee will supervise their work for two years to ensure compliance with legislative and industry requirements. After the 2 year period, they may then decide whether to remain a Credit Representative or to apply for their own full licence. 

‘Prospective representatives’ covers the whole shebang: they can be a licensee who is