(1) The principal shall consider the following information in assessing the eligibility of a prospective agent or master-agent:

(a) criminal record in matters relating to finance, fraud, honesty or integrity;

(b) negative information in credit reference bureaus;

(c) business experience and track record, where applicable; and

(d) any other matter which impacts on the person.

(2) A principal before entering into an agency agreement shall ensure that a prospective master-agent meets the following eligibility requirements:

(a) the prospective master-agent

(i) has not been classified as a non-performing borrower by a bank or specialised deposit-taking institution in the twelve months before the date of application; and

(ii) shall maintain the status in subparagraph (i) for the duration of the contract; and

(b) the prospective master-agent shall exhibit financial soundness and cash handling capabilities, arrangements for security and internal control commensurate with the Operational risks.

(3) A principal shall have clear and well documented policies and procedures for the conduct of an agent due diligence and ensure that the agency business, including any parts undertaken by

(a) a master-agent, and

(b) an agent network manager, are at all times in compliance with the policies and procedures for agent due diligence.

(4) The procedures under subsection (3), shall at a minimum, contain

(a) new agent takes on procedures;

(b) initial due diligence and regular due diligence checks to be performed at specified intervals; and

(c) a list of early warning signals and corrective actions.

(5) An agent due diligence shall clearly specify roles and responsibilities of various functions and individuals within the business of the principal with respect to the management and supervision of the agent.