The ACCC has granted interim permissions for ASF members to jointly assist in the administration of the government’s SFSF, to ensure faster and more efficient administration.
The Australian Competition and Consumer Commission has granted interim permission for members of the Australian Securitisation Forum to work together in the administration of the federal government’s $15-billion Structured Finance Support Fund (SFSF), in order to expedite the function of the fund.
The newly created SFSF aims to help smaller authorised deposit-taking institutions (ADIs) and non-ADI lenders access funding at competitive prices.
While the SFSF will be administered by the Australian Office of Financial Management (AOFM), the interim authorisation provided by the ACCC will allow ASF members to coordinate their input on how the scheme is administered.
According to the ACCC, it has authorised the ASF and its members to discuss how the AOFM should administer the fund, including providing their views on developing measures for issuing new debt, arranging appropriate funding arrangements, allowing for hardship relief for borrowers and ensuring the continued flow of funding to smaller lenders.
Under the provisions, the AOFM will keep the ACCC informed about any developments arising out of these discussions.
The interim authorisation has been provided. However, the ACCC will now seek feedback on the application for final authorisation, which is sought for a period of 12 months.
According to the ACCC, granting these interim provisions intends to more quickly and efficiently assist smaller lenders maintain liquidity amid the COVID-19 pandemic, helping them in continuing to issue loans to consumers and small businesses.
The decision also makes note of the importance of non-major banks and non-banks in providing finance solutions for small to medium-sized enterprises (SMEs) and in keeping the SME lending market competitive.
ACCC chair Rod Sims said: “The Structured Finance Support Fund is likely to be more quickly and effectively implemented when members of the ASF are allowed to work together to support the Australian Office of Financial Management in administering the fund.
“Many Australian smaller businesses and individuals rely on small lenders.
“Quick and effective implementation of the SFSF will help ensure that small lenders can continue to support these businesses by offering affordable credit during this very difficult time.”
Mr Sims continued: “It’s also crucial that competition in the loans market in Australia is maintained. The competition provided by small lenders needs to be supported to help mitigate the economic impact of COVID-19.”
“It is important to note that ASF members are not authorised to exchange information about margins, costs, repayment terms or specific offers to customers.
“This is aimed at ensuring competition between lenders continues,” Mr Sims concluded.