Mortgage aggregators to be included in ASIC reference checking

From 20 August, ASIC is extending its reference checking protocol. The changes will enable aggregators to obtain references on mortgage broker licensees and licensees’ representatives.

The Mortgage and Finance Association of Australia (MFAA) has thrown its support behind the implementation, saying that reference checking will help mitigate the risk of misconduct.

“Licensees are required to conduct a reference check before accrediting or onboarding a broker. Overall, this worked well however was restricted to information sharing between licensees only,” said MFAA CEO Anja Pannek.

“Given many brokers hold their own licence, this meant aggregators were excluded from the process in a large number of cases, a clear gap in the protocol. We’ve advocated for the protocol to be extended to aggregators since it was introduced so that it is comprehensive, fit for purpose and reflects how the industry operates. So, we’re pleased to see these changes come into effect.”

The ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2024/647 (2024 Protocol) will replace the ASIC Corporations and Credit (Reference Checking and Information Sharing Protocol) Instrument 2021/429 (2021 Protocol).

The MFAA supported the expansion of reference checking protocol in its 2023–24 pre-budget submission. Now, these changes are expected to make the broking process “more robust, holistic and simpler.”

“This change means Australian borrowers can have even more trust and confidence in the broker industry. Letters of separation are unregulated – reference checking is. The practice of letters of separation was put in place at a time when there was no regulation, no way of checking the background of a broker seeking accreditation or re-accreditation. This practice has now gone way past its expiry date,” said Pannek.

“Given we now have a comprehensive reference checking regime that includes all key stakeholders, letters of separation should no longer be required. We’ll be working with industry highlighting the need to move from letters of separation to reference checking – both with aggregators and lenders.

“The aim of the form is to make this process easier for aggregators, lenders and brokers in those cases. The form will be hosted on our website for industry use.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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