David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

asked the Minister representing the Minister for Financial Services and Superannuation, upon notice, on 29 September 2010:

(a) How much training are banks and lending institutions required to undertake each year in training their staff in the recovery of securities; (b) in what areas is this training provided; and (c) who provides this training.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

The Minister for Financial Services and Superannuation has provided the following answer to the honourable senator's question:

Under the National Consumer Credit Regime all providers of credit must have a credit licence. The minimum training requirements are set out in ASIC Regulatory Guide 206. The National Consumer Credit Protection Act 2009 requires that credit provider's representatives are adequately trained and competent to engage in the credit activities that are authorised by a credit licence.

The Australian Securities and Investments Commission (ASIC) has released Regulatory Guide 146 which sets out minimum training standards for people providing financial product advice to retail clients.

Training courses and individual advisers meet the training standards if they have been assessed by an authorised assessor as meeting ASIC's knowledge and skill requirements to the relevant educational level.

There is no specific training for enforcing securities and for the realisation of assets. State legislation governs the realisation of land. The realisation of property of companies is governed by the Corporations Act. The Commonwealth is also developing a personal property securities regime.

A bank may appoint a receiver to realise assets. A receiver is required by law to be a registered liquidator. A receiver is primarily obligated to look after the interests of the secured creditor who appointed them. However, the Corporations Act 2001 (Corporations Act) also requires them to take reasonable steps to attempt to sell charged property for not less than its market value, or if there is no market value, the best price reasonably obtainable. In addition, they are under an obligation to incur only reasonable and necessary costs.

In addition to this, their conduct is subject to a range of duties that apply to company officers in general. Receivers are afforded a high degree of independence in the manner in which they carry out their functions. The Courts have the power to review and intervene in the manner in which they legally carry out their functions.

Although a bank cannot be a receiver, it may become a controller of property. The Corporations Act contains extensive obligations on controllers, similar to those imposed on receivers.