The Prudential regulator releases new guidelines for restricted words under the banking license.
Last week the Australian Prudential Regulation Authority (APRA) released the Guidelines: Restricted words under Banking Act 1959.
In the guidelines, the APRA writes “It is an offence for a person to use a restricted word or expression in Australia in relation to a financial business, except where APRA has granted a consent or exemption, or where a statutory exception applies.”
The guidelines then it goes on to state that, “The penalty for this offence is 50 penalty units2 for each day that a restricted word or expression is used. At the time of publication of these guidelines, 50 penalty units is equivalent to $10,500 for an individual and $52,500 for a corporation.”
While under the Australian Financial Services License (AFSL) or under the Australian Credit Licence holders can be considered financial businesses an application and approval are still required for a business to be able to use what the prudential regulator refers to as a restricted word or phrase.
The Australian Securities and Investments commission usually requires those that are registering a company name that uses a restricted work to provide confirmation that has been provided by the prudential regulator, so that they will not be breaching the banking act.
“A company that has made an application for authorisation as an ADI may make limited use of restricted words or expressions provided that it complies with sections 66 and 66A of the Banking Act, and the use is not misleading.”
Click here to download the Guidelines: Restricted words under Banking Act 1959.