Asset Based Finance Association Code of Business Practice

This is the Asset Based Finance Associations code of business practice

July 2008 Edition

1.     Introduction

The objects for which the Asset Based Finance Association (“ABFA”) has been set up are:

  • to promote the current asset based working capital finance services provided by ABFA members
  • to provide education courses and training opportunities for people working in the Industry
  • to promote and represent the interests of ABFA members in a national and global environment
  • to encourage co-operation and communication between ABFA members and those who provide services to the Industry

In support of these objectives the Executive Committee of the ABFA has published this Code of Business Practice.

 2.    Purpose and scope of this Code

Members of the ABFA must be prepared to operate fairly and reasonably in accordance with the ABFA’s standards of good practice, probity and professionalism set out herein. Compliance with this Code, where relevant, is a condition of full membership of the Association.

This Code does not indicate in precise terms events or actions, which must or must not be taken.  It sets out key commitments, and principles which members are expected to apply, with good sense and in the spirit of the Association’s objectives.

The interpretation and application of the principles set out in this Code is the responsibility of the Executive Committee of the ABFA.

From time to time the Executive Committee may issue guidance notes or amendments to this Code.

 3.   Key Commitments:

 Members shall:

  • conduct their business lawfully, comply with all relevant legislation and judicial decisions and trade fairly and responsibly
  • behave at all times with integrity
  • act with care in the day-to-day conduct of their business
  • not knowingly misrepresent facts to a client or prospective client concerning any aspect of a transaction
  • provide adequate education and training for members of their staff, bringing this Code and the principles contained in it to their attention and requiring them to carry out their duties in accordance with it.

4.    Professionalism

Services provided by members shall, in every case, be of the highest quality.  Members of the ABFA are required to set and maintain rigorous and exemplary professional standards within their businesses and in their relationships with clients and others with whom they deal.

5.    Sales Literature and Marketing

Any marketing activity undertaken by a member, whether advertising, sales literature or verbal assertions shall be honest, fair and clearly understandable. Where members use independent introducers of business, all reasonable steps must be taken to ensure that the introducer upholds the same standards and does not misrepresent facts regarding a member’s services or any proposed transaction.

Members shall ensure that any services promoted are genuinely available to the quality described.

Advertisements must not infringe the British Code of Advertising Practice or the equivalent Irish code.

Members should, in their negotiations with prospective clients, always ensure that disclosure is made of commission payable to an introducer, whatever the agency status (or otherwise) of the introducer”

6.    Clarity of Arrangements

Any documents evidencing the services to be provided by members shall clearly state the rights and duties of both parties to the arrangement. In particular, the following must be unambiguous, fair and reasonable:

  • charges
  • interest and/or discount
  • any minimum period for the relationship
  • any period of notice to terminate the arrangement

It is advisable that any method and/or amount of any charges arising upon early termination are clearly set out in the Master Agreement. Where such charges are levied a breakdown of their calculation should be given.

7.    Confidentiality of Information

Members must respect the confidentiality of information supplied to them by clients or prospective clients.  Information must only be disclosed to external parties if required by law or public duty or if an informed consent has been clearly been given. Members are reminded of their duties of confidentiality imposed by the Data Protection Act 1998.

8.    Settlement of Credit Protection

Members who provide credit protection must promptly settle any bad debt losses relating to credit approved debts, in accordance with the terms of their legal agreement with the client.

9.    Transfer to another Factor/Discounter/ABL

Members will facilitate the move from one factor to another, should a client wish to make such a change.  The ABFA has an established set of procedures to facilitate the smooth transfer of clients between members that should be used wherever possible.

10.    Improper or Unfair Advantage

Members must not take improper or unfair advantage of either their position as members of the ABFA or of any information provided by the ABFA.

11.  Complaints

Members must deal promptly and fairly with disputes and complaints from clients and their customers.  Any client making contact with the ABFA will be encouraged to take up their complaint with the Managing Director of the member concerned. Complainants must appreciate that this Code is only for use between the Association and its members. It does not give rights to any other parties.

12.  Conclusion

The ABFA expects all members to adhere to this Code. However third parties should be aware that under its Memorandum of Association, publicly filed at Companies House, the ABFA is not a public regulatory authority and has no financial or other responsibility to any persons arising out of the financial or other dealings of its members.

This Code was approved and adopted by the Executive Committee of the Factors and Discounters Association on 26 March 2008  pursuant to Article 65 of the ABFA’s Articles of Association.

  

­­­­­­­­­­­­­_________________________

Ted Ettershank

Chairman of the Association

 

 

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