The Australian Financial Industry Association has released a draft code of practice for the growing 'buy now pay later' sector, a move the association has claimed as a world first. The draft code, foreshadowed late last year, is a direct response by the top end of the BNPL sector to an inquiry conducted by the Senate Economics Reference Committee, which recommended the development of a code of practice for the industry. The content of the draft code was also influenced by findings from ASIC's review of the BNPL sector (Report 600 - see infographic, right), completed in November 2018. AFIA, which has over 100 members offering a diverse range of services, said its Buy Now Pay Later providers group represents over 95 per cent of the Australian market. This group comprises Afterpay, Brighte, flexigroup, Latitude, Openpay, Payright and Zip Co. Diane Tate, AFIA CEO, said the draft code would require BNPL members to meet standards that go "above and beyond [their] existing legal obligations", while balancing innovation, regulation and consumer choice in a number of areas. Key sections of the draft code will cover:   customer safeguards, such as a commitment to apply "reasonable" late fees, and to cap other fees (although these are already subject to specific regulations), and also provide a two-month notice period before changing fees; upfront assessment of customers' suitability - notably preventing product access to customers under the age of 18 years; limiting over-commitment by customers; the role of the Australian Financial Complaints Authority as an independent external dispute resolution scheme, for all AFIA members - and this draws in providers that would not normally be required to join AFCA; and hardship assistance for customers experiencing financial difficulties, with a commitment to never initiate bankruptcy proceedings against a customer. Tate said the code was drafted to be principles-based, as prescriptive rules - for instance, defining an exact upper limit for interest charges - could be viewed as price-fixing. The influence of AFIA's buy now pay later code of practice is likely to widen sooner than its