PRINCIPLES OF RECIPROCITY AND DATA EXCHANGE

(PRDE)

The PRDE is a set of agreed principles between Credit Providers and Credit

Reporting Bodies that voluntarily become signatories.

The PRDE ensures that signatories have trust and confidence in their credit reporting

exchange.

The intention of the PRDE is to create a clear standard for the management, treatment

and acceptance of credit related information amongst signatories.

Two key features of the PRDE are adherence to:

- The ACRDS; and

- The principles of reciprocity for signatory data contribution.

The PRDE creates three Tier Levels of credit reporting exchange.

For Further Information: For a Signatory Information Pack:

James Newbury Rob Falvo

Industry Affairs Manager Industry Engagement Manager

M: 0423 289 079 M: 03 9863 7861

E: jnewbury@arca.asn.au E: rfalvo@arca.asn.au

Note:

The enclosed handout is a simplification of the Principles of Reciprocity and Data

Exchange and is only intended as a summary guide. For a comprehensive

understanding, please refer to the source document itself available on the ACCC

website: http://www.accc.gov.au/.

PRINCIPLE 1:

The obligations under this PRDE shall be binding and enforceable upon PRDE

signatories. PRDE signatories agree to execute the Deed Poll to make this PRDE and the

authority of the PRDE Administrator Entity (and through it, the Industry

Determination Group and Eminent Person) effective and binding.

Obligations on Signatory Credit Providers

CPs will only obtain the supply of credit reporting information from a CRB that is a

PRDE signatory.

(Paragraph 8)

CPs will nominate a single Tier Level at which they will obtain information.

(Paragraph 9)

A CP will only supply partial information or comprehensive information to the extent

permitted under the PRDE.

(Paragraph 11)

Where a CP has chosen to contribute negative information they must contribute the

following types of information: identification information, default information,

payment information and new arrangement information.

(Paragraph 19)

A CP may elect to specify a Designated Entity. The Designated Entity must choose a

supply Tier Level and contribute credit information consistent with that Level.

(Paragraph 22 and 23)

When contributing default information, a CP must ensure it is contributed within a

reasonable timeframe of the account becoming overdue.

(Paragraph 20)

A Designated Entity must operate under its own brand, and have in place systems and

processes to ensure partial and/or comprehensive data is not transferred outside the

Designated Entity.

(Paragraph 26)

Obligations on Signatory Credit Reporting Bodies

CRBs will only supply credit reporting information to a CP to the extent permitted

under the PRDE.

(Paragraph 4)

A CRB may supply negative information to any person and it is not necessary for that

person or organisation to be a signatory to this PRDE.

(Paragraph 17)

Obligations on All Signatories

CPs and CRBs will pay such costs identified by the PRDE Administrator as required

to administer the PRDE.

(Paragraph 7 and 13)

PRINCIPLE 2:

It is necessary to be a PRDE signatory in order to exchange PRDE signatory Consumer

Credit Liability Information (CCLI) and Repayment History Information (RHI) with

other PRDE signatories.

Obligations on Signatory Credit Providers

A CP will only contribute and obtain supply of partial information and comprehensive

information from a CRB which is a signatory to this PRDE.

(Paragraph 39)

A CP must contribute partial information or comprehensive information before

obtaining supply of this data from another PRDE signatory.

(Paragraph 34)

A CP must notify the PRDE Administrator of their Securitisation Entities.

(Paragraph 40)

A Securitisation Entity can only obtain credit reporting information that would have

been accessible to the CP.

(Paragraph 41)

Obligations on Signatory Credit Reporting Bodies

A CRB must be a signatory to the PRDE to to receive partial or comprehensive

information.

(Paragraph 35)

PRINCIPLE 3:

Service agreements between PRDE signatories will require reciprocity and the use of

the ACRDS.

Obligations on Signatory Credit Providers

CP signatory contributed data must comply with the ACRDS, but the CP can obtain a

service that converts the data into a compliant format.

(Paragraph 50)

Obligations on Signatory Credit Reporting Bodies

A CRB will only accept contributed information that is ACRDS compliant.

(Paragraph 48)

CRBs must not constrain CPs from contributing credit information to another CRB.

(Paragraph 51)

Obligations for Service Agreements

Service agreements must:

- Require that CPs contribute information at their nominated Tier Level,

- Require that CRBs to supply information at the nominated Tier Level,

- Require CP contributed information to adhere to the ACRDS.

(Paragraph 47)

PRINCIPLE 4:

PRDE signatories agree to adopt transition rules which will support early adoption of

partial and comprehensive information exchange.

Obligations on Signatory Credit Providers

At their effective date, a signatory CP to the PRDE must contribute at least 50% of the

accounts at their nominated tier level.

(Paragraph 54a)

Within twelve months of their effective date, a signatory CP must contribute all

information at their nominated tier level.

(Paragraph 54b)

On changing tier levels, a CP must notify the Administrator at least 90 days before

contributing information at the new level.

(Paragraph 55a)

If a CP seeks to change tiers to a higher level, they must contribute 50% before

accessing the higher tier and within twelve months contribute all information required

of the nominated tier.

(Paragraph 55b)

CPs must notify the Administrator upon attainment of full compliance and that

notification will be published to other signatories.

(Paragraph 57)

Obligations for Data Supply

Data supply transition will:

- For partial information, supply will include accounts which are open at the date of

first contribution and then all consumer credit accounts on an ongoing basis.

(Paragraph 58b)

- For comprehensive information, supply will include accounts which are open for a

period of three calendar months prior to the first contribution and then all consumer

credit accounts on an ongoing basis.

(Paragraph 58c)

Obligations for the Acquisition of Consumer Credit Accounts

Where a CP acquires consumer credit accounts from another CP:

- They may review them in a period of 90 days,

- Then must contribute at least 50% of the accounts required,

- And within 12 months they must contribute all of the accounts acquired.

(Paragraph 59 and 60)

PRINCIPLE 5:

PRDE signatories will be subject to monitoring, reporting and compliance

requirements, for the purpose of encouraging participation in the exchange of credit

information and data integrity

Dispute Process

The principle sets out an agreed process for addressing non-compliance with the

PRDE that signatories are required to adhere to.

(Paragraph 65)

Signatories must comply with the recommendations or directions of the Industry

Determination Group and the Eminent Person within the time they specify.

(Paragraph 93a)

Stage One Dispute

Where a signatory forms an opinion that another signatory is not compliant with the

PRDE they must issue them with a report of non-compliance and within 30 days

confer, respond and seek to develop a Rectification Plan. If the Rectification Plan

results in compliance within that 30 day period, the dispute is closed.

(Paragraph 66 to 68)

Stage Two Dispute

If the Rectification Plan is entered into but the non-compliant conduct is not resolved,

the Plan is made available to all signatories who have an opportunity to object.

(Paragraph 69, 71 to 73)

Stage Three Dispute

If there is no Rectification Plan entered into within the Initial Period and the conduct

remains non-compliant, an Industry Determination Group will convene, review a

dispute and issue a recommendation. This may include a conciliation process.

(Paragraph 70, 75 to 81)

Eminent Person

In the event either or both of the parties reject a recommendation of the Industry

Determination Group, the dispute will be referred to the Eminent Person for review

and a final binding decision.

(Paragraph 83 to 88)

Compliance outcomes

The possible outcomes of the IDG or EP are that the respondent is compliant, issuance

of a formal warning, issuance of a direction or finally a requirement that the

respondent obtain supply at a lower Tier Level.

(Paragraph 89)

PRINCIPLE 5 (Continued):

Reporting Obligations for the Administrator

The PRDE Administrator Entity will keep a register of signatories and their signature

date, effective date, nominated tier, designated entities, securitisation entities and

compliance attestation.

(Paragraph 102)

The PRDE Administrator Entity will report to CPs the Tier Levels of signatories,

Designated Entities, Securitisation Entities and Attainment of full compliance.

(Paragraph 104)

The PRDE Administrator Entity will, upon request, report to CRBs the following

information about a CP, their Tier Level, Designated Entities, Securitisation Entities

and Attainment of full compliance.

(Paragraph 105)

The PRDE Administrator Entity may initiate a report of non-compliant conduct.

(Paragraph 107)

PRINCIPLE 6:

A broad review of the PRDE to be completed after three years.

The PRDE will be independently reviewed after it has been in operation for 3 years

and at regular intervals after that (not more than every 5 years).

(Paragraph 109)

The PRDE may be varied if required, after sufficient consultation with signatories.

(Paragraph 111)