ASIC has published regulatory guidance for mortgage brokers which comes into effect in 2021.
From 1 January 2021, mortgage brokers will be required to act in the best interests of consumers and to prioritise consumers’ interests when providing credit assistance.
ASIC commissioner Sean Hughes said these are important and timely reforms for the mortgage broking industry and for customers shopping for a loan. This reform was legislated by the parliament to improve the quality of credit assistance provided to consumers.
“Consumers rightly expect mortgage brokers to act in their best interests and ASIC’s guidance describes how we expect them to do so. Under these new obligations, let there be no doubt – the consumer must always come first.
“We released this regulatory guide as early as effectively possible, to help industry prepare on a timely basis for the best interests duty and related obligations before January 2021,” Hughes said.
From 1 January 2021, ASIC will closely monitor conduct and outcomes to ensure mortgage brokers are complying. The reforms are part of recommendations proposed by by Hayne Royal Commission.