Following the announcement of the government’s $15 billion Structured Finance Support Fund (SFSF), the Australian Competition and Consumer Commission has granted interim permission for members of the Australian Securitisation Forum (ASF) to facilitate the fund’s quick and effective implementation.
The SFSF aims to aid smaller authorised deposit-taking institutions (ADIs) and non-ADI lenders to access funding at competitive prices.
While the fund will be administered by the Australian Office of Financial Management (AOFM), the authorisation provided by the ACCC will allow ASF members to co-ordinate their input on how the scheme is administered.
“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,” ACCC chair Rod Sims said.
“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.”
Recognising the cruciality of maintaining competition in the loans market in Australia, Mr Sims explained that the competition provided by small lenders needs to be supported to help mitigate the economic impact of COVID-19.
The ACCC has authorised the ASF and its members to discuss how the AOFM should administer the SFSF, including providing their views to the AOFM about 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.
Mr Sims, however, noted that there are thing members of ASF cannot do.
“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 said.
Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months.