Financial Sector (Collection of Data) (reporting standard) determination No. 51 of 2006 Reporting Standard RRS 320.2 Equity Securities Held (Cth)
Financial Sector (Collection of Data) (reporting standard) determination No. 51 of 2006
Reporting standard RRS 320.2 Equity Securities Held
Financial Sector (Collection of Data) Act 2001
I, Charles Watts Littrell, a delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:
REVOKE the Reporting Standard RRS 320.2 Equity Securities Held which is in force as at the date of this determination (the old standard);
DETERMINE the Reporting standard RRS 320.2 Equity Securities Held in the form set out in the Schedule, (the new standard) which applies to financial sector entities of the kind specified in paragraph 2 of the new standard.
Under section 15 of the Act, I DECLARE that:
the new standard shall begin to apply on the later of 1 July 2006 and the date of registration of this determination on the Federal Register of Legislative Instruments; and
the old standard shall cease to apply on the day the new standard begins.
Dated 26 June 2006
[signed]
Charles Littrell
Executive General Manager
Policy, Research and Statistics Division
APRA
Interpretation
In this Notice
APRA means the Australian Prudential Regulation Authority.
Schedule
Reporting standard RRS 320.2 Equity Securities Held comprises 12 pages commencing on the following page.
Reporting Standard RRS 320.2
Equity Securities Held
Objective of this reporting standard
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001.
Subject to what follows, it requires a registered entity that had total assets of $500 million or more at the end of the most recent complete financial year at the time of reporting, to give APRA quarterly statements of equity securities held.
It also provides that if there are two or more registered entities of the same category[1] in a group of related bodies corporate (e.g. two or more money market corporations in the group), and the combined value of their total assets was $500 million or more at the end of the most recent complete financial year, one of them must give APRA quarterly statements of equity securities held.
[1] ‘Category’ is defined in paragraph 16 of this reporting standard.
If there is more than one registered entity of the same category in a group of related bodies corporate, only one of them will have to report to APRA under this reporting standard.[2] That report must cover all registered entities of the same category in the group.
[2] An example of how this reporting standard applies in relation to related bodies corporate of the same category is set out as a note to paragraph 4.
This reporting standard outlines the overall requirements for the provision of the required information to APRA. It should be read in conjunction with:
Form RRF 320.2 Equity Securities Held and the associated instructions (all of which are attached and form part of this reporting standard); and
Reporting Standard RRS 320.0 Statement of Financial Position.
Purpose
Data collected in Form RRF 320.2 Equity Securities Held (Form RRF 320.2) is used for the purposes of the Reserve Bank of Australia. It may also be used by APRA, for the purpose of prudential supervision, and the Australian Bureau of Statistics.
Application
This reporting standard applies to those registered entities outlined in paragraph 3.
Information required
Subject to paragraph 4, a registered entity must provide APRA with the information required by Form RRF 320.2 in respect of a reporting period if, at the end of the most recent complete financial year for the registered entity, it:
(a)had total assets of $500 million or more;[3] or
[3] For the purposes of this test, assets are to be valued in accordance with their current market value.
(b)was one of a number of registered entities that, during the reporting period, were:
(i) of the same category as the first-mentioned registered entity; and
(ii) related bodies corporate of each other
and, at the end of the most recent complete financial year for the first-mentioned registered entity, had combined total assets of $500 million or more.
However, a registered entity is not required to report in respect of a particular reporting period if another registered entity has reported under this reporting standard in respect of that reporting period, and that other entity is both:
(a)a related body corporate of the first-mentioned registered entity; and
(b)of the same category as the first-mentioned registered entity.
Example of the application of paragraphs 3 and 4: RE1 Ltd is a registered entity. Under section 11 of the Collection of Data Act it has been allocated to the category of ‘money market corporation’. At the end of the most recent complete financial year it had assets of $40 million. RE2 Pty Ltd is a subsidiary, and therefore a related body corporate, of RE1. It is also a money market corporation. At the end of the most recent complete financial year it had assets of $20 million. For the purposes of the test in paragraph 3(b) their respective total assets are added together, producing a total of $60 million. This exceeds the $50 million test in paragraph 3(b). Having regard to paragraph 4, one of the two companies is required to report to APRA under this reporting standard in respect of the reporting period (assuming there are no other money market corporations in the group that have reported to APRA in respect of that reporting period).
Reporting periods and due dates
Subject to paragraph 6, a registered entity must provide the information required by this reporting standard for each quarter ending 30 September, 31 December, 31 March and 30 June.
APRA may, by notice in writing to a particular registered entity, vary the timing of a reporting period for the registered entity (to align it with the registered entity's own financial year, within the meaning of the Corporations Act 2001) or vary the duration of a reporting period for the registered entity.
The information required by this reporting standard must be provided to APRA within 20 business days after the end of the reporting period to which it relates.
APRA may grant a registered entity an extension of a due date in writing, in which case the new due date for the provision of the information will be the date on the notice of extension.
Forms and method of submission
The information required by this reporting standard must be given to APRA either:
(a)in electronic form, using one of the electronic submission mechanisms provided by the 'Direct to APRA' (also known as 'D2A') application; or
(b)manually completed on paper, which must be faxed or mailed to APRA's head office.
Note: the Direct to APRA application software and paper forms may be obtained from APRA.
Authorisation
All information provided by a registered entity under this reporting standard must be subject to processes and controls developed by the registered entity for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the registered entity to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
If a registered entity submits information under this reporting standard using the ‘Direct to APRA’ software, it will be necessary for an officer of the registered entity to digitally sign, authorise and encrypt the relevant data. For this purpose APRA’s certificate authority will issue 'digital certificates', for use with the software, to officers of the registered entity who have authority from the registered entity to transmit the data to APRA.
If information under this reporting standard is provided in paper form, it must be signed on the front page of the relevant completed form by either:
(a)the Principal Executive Officer of the registered entity; or
(b)the Chief Financial Officer of the registered entity (whatever his or her official title may be).
Minor alterations to forms and instructions
APRA may make minor variations to:
(a)a form that is part of this reporting standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or
(b)the instructions, to clarify their application to the form
without changing any substantive requirement in the form or instructions.
If APRA makes such a variation it must notify in writing each registered entity that is required to report under this reporting standard.
Transitional
A registered entity must report under the old reporting standard in respect of a transitional reporting period. For these purposes:
old reporting standard means the reporting standard revoked in the determination making this reporting standard (being the reporting standard which this reporting standard replaces).
transitional reporting period means a reporting period under the old reporting standard:
(a)which ended before the date of revocation of the old reporting standard; and
(b)in relation to which the registered entity was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.
Interpretation
In this reporting standard:
business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.
category means a category to which a registered entity has been allocated under section 11 of the Financial Sector (Collection of Data) Act 2001.
Principal Executive Officer means the principal executive officer of the registered entity for the time being, by whatever name called, and whether or not he or she is a member of the governing board of the entity.
registered entity has the meaning given in the Financial Sector (Collection of Data) Act 2001 (that is, a corporation whose name is entered in the Register of Entities kept by APRA under section 8 of that Act).
Note: references to registered financial corporations in the forms and instructions that form part of this reporting standard are taken to have the same meaning as registered entity.
related body corporate has the meaning given in section 50 of the Corporations Act 2001.
reporting period means a period defined in paragraph 5 or, if applicable, paragraph 6.
Reporting Form RRF 320.2
Equity Securities Held
Instruction Guide
General directions and notes
Reporting entity
This form is to be completed by all Registered Financial Corporations (RFCs) that have total assets equal to or greater than $500 million, after consolidating all RFCs of the same category in a group of related bodies corporate (e.g. two or more money market corporations in the same group) on a Domestic books basis.
The Domestic books of the registered entity relates to the Australian books of the Australian entity and has the following scope:
this form should be completed on a consolidated basis for all legal entities in your Australian enterprise group that are required to file this return;
do not consolidate Australian and offshore controlled entities or associated entities that are not required to complete this form;
exclude offshore branches of the Australian registered entity from this reporting unit;
report your Australian consolidated entity’s operations/transactions that are booked inside Australia; and
include transactions with non-residents recorded on Australian books.
Reporting period
The form is to be completed as at the last business day of the stated quarter (i.e. March, June, September and December). All RFCs that have total assets equal to or greater than $500 million should submit the completed form to APRA within 20 business days of the end of the quarter.
Unit of measurement
All RFCs that have total assets equal to or greater than $500 million are asked to complete the form in thousands of Australian dollars rounded to the nearest whole number (no decimal place).
Timing
Report assets and liabilities, and transactions in assets and liabilities as at the date of change of ownership.
Netting
Unless otherwise specifically stated, institutions are to comply with the prerequisite for netting outlined in Australian accounting standards AASB 1014 Set-off and Extinguishment of Debt and AASB 1033 Presentation and Disclosure of Financial Instruments.
Term to maturity
References to term to maturity in this form are references to original term to maturity.
Valuation and currency conversion
Closing balances should be reported at market price effective at the reference date.
Where denominated in foreign currency stock market values in foreign currency should be converted to AUD at the spot rate effective as at the reference date.
For holdings of shares in unlisted companies, if a market price is not available as at the reference date, estimate the market price of your shares by using one of the following methods:
a recent transaction price;
director's valuation; or
net asset value (net asset value is equal to total assets, including intangibles, less non-equity liabilities and less the paid up value of non-voting shares. Assets and liabilities should be recorded at estimated market value, rather than historical values).
Net purchases is the net result of dealing in the securities, i.e. purchases less sales.
Transactions should be reported at market prices in AUD, converted at the appropriate spot rate at the time of the transaction, without the addition or subtraction of transaction costs such as brokerage.
Basis of preparation
Unless otherwise specifically stated, institutions are to comply with Australian accounting standards regarding the measurement of asset, liability and equity items.
Specific instructions
Refer to the sector definitions in the instructions RRF 320.0 Statement of Financial Position (RRF 320.0) instructions as a general guide for reporting by sector. Equity investments in the parent entity, controlled entities, associates or joint ventures should be reported to the sector classification of this related entity.
Shares and units listed on the Australian Stock Exchange (ASX) and issued by residents
Report all trading and investment securities listed on the ASX at market value. Report the net transactions during the quarter by sector of issuer (excluding transactions via repurchase/stock lending agreements).
Include:
ordinary shares;
units in trusts;
preference shares;
strategic investment in the equity securities of entities that are deemed to be controlled entities, associates or joint ventures and are listed on the ASX;
securities (stock) lent or sold under repurchase agreements (these amounts should be reported in RRF 320.5 Securities Subject to Repurchase and Resale and Stock Lending and Borrowing (RRF 320.5)); and
short sold positions as a negative asset against the appropriate equity security item.
Exclude:
convertible notes prior to conversion;
equity in non-resident companies listed on the ASX, include this asset as unlisted equity; and
securities borrowed or purchased under resale agreements (these amounts should be reported in RRF 320.5).
Shares and units not listed on ASX
Report all trading and investment equity securities at market value (or fair valuation). Report the net transactions during the quarter by sector of issuer (excluding transactions via repurchase/stock lending agreements).
Include:
ordinary shares;
units in trusts;
preference shares;
equity in non-resident companies listed on the ASX;
equity in non-resident companies listed on overseas stock exchanges;
equity in unlisted companies, domestic and overseas;
strategic investment in the equity securities of entities that are deemed to be controlled entities, associates or joint ventures and are not listed on the ASX; and
securities lent or sold under repurchase agreements (these amounts should be reported in RRF 320.5).
Exclude:
convertible notes prior to conversion; and
securities borrowed or purchased under resale agreements (these amounts should be reported in RRF 320.5).
Reconciliation with RRF 320.0
Total equity securities held (market value)
The sum of:
total listed equities (RRF 320.2 Equity Securities Held (RRF 320.2));
total unlisted equities (RRF 320.2); and
shares and units issued by non-residents (RRF 320.2)
equals
the sum of:
foreign assets - equity (RRF 320.0) adjusted from book value to market value;
trading securities - equity securities (RRF 320.0); and
investment securities - equity securities (RRF 320.0) adjusted from carrying value to market value.
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