Financial Sector (Collection of Data) (reporting standard) determination No. 60 of 2006 Reporting Standard RRS 394.0 Personal Finance (Cth)
Financial Sector (Collection of Data) (reporting standard) determination No. 60 of 2006
Reporting standard RRS 394.0 Personal Finance
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 394.0 Personal Finance which is in force as at the date of this determination (the old standard);
DETERMINE the Reporting standard RRS 394.0 Personal Finance 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 394.0 Personal Finance comprises 35 pages commencing on the following page.
Reporting Standard RRS 394.0
Personal Finance
Objective of this reporting standard
This reporting standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001. It applies to relevant registered entities. In general terms these are entities described in the Schedule to this reporting standard.
Subject to what follows, this reporting standard requires a relevant registered entity to give APRA monthly statements in relation to personal finance.
However, if there are two or more relevant 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), then only one of them is required to give APRA a statement in relation to personal finance in any given month. That statement must cover all relevant registered entities of the same category in the group.
[1] ‘Category’ is defined in paragraph 16 of this reporting standard.
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 394.0.1 Personal Finance in NSW;
Form RRF 394.0.2 Personal Finance in VIC;
Form RRF 394.0.3 Personal Finance in QLD;
Form RRF 394.0.4 Personal Finance in SA;
Form RRF 394.0.5 Personal Finance in WA;
Form RRF 394.0.6 Personal Finance in TAS;
Form RRF 394.0.7 Personal Finance in NT;
Form RRF 394.0.8 Personal Finance in ACT; and
the instructions to those forms, all of which are attached and form part of this reporting standard.
Purpose
Data collected in Forms RRF 394.0.1 to RRF 394.0.8 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 all relevant registered entities.
Information required
Subject to paragraph 4, a relevant registered entity must provide APRA with the information required by Forms RRF 394.0.1 to RRF 394.0.8 in respect of a reporting period.
However, a relevant registered entity is not required to report in respect of a particular reporting period if another relevant 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.
Reporting periods and due dates
Subject to paragraph 6, a relevant registered entity must provide the information required by this reporting standard for each calendar month.
APRA may, by notice in writing to a particular relevant registered entity, vary the timing of a reporting period for the relevant registered entity or vary the duration of a relevant reporting period for the registered entity.
The information required by this reporting standard must be provided to APRA within 10 business days after the end of the reporting period to which it relates.
APRA may grant a relevant 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 relevant registered entity under this reporting standard must be subject to processes and controls developed by the relevant registered entity for the internal review and authorisation of that information. It is the responsibility of the board and senior management of the relevant 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 relevant 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 relevant registered entity who have authority from the relevant 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 relevant 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.
relevant registered entity means:
(a)a registered entity listed in Part 1 of the Schedule, unless APRA has made a determination, under clause 1 of Part 2 of the Schedule, that the entity is not a relevant registered entity; or
(b)a registered entity that APRA has determined, under clause 2 of Part 2 of the Schedule, is a relevant registered entity.
Note: references to a reporting entity in the forms and instructions that form part of this reporting standard are taken to have the same meaning as relevant registered entity.
reporting period means a period defined in paragraph 5 or, if applicable, paragraph 6.
Schedule
Part 1: Relevant registered entities
ANZ Rental Solutions Pty Ltd
ANZ Specialised Asset Finance Pty Ltd
ANZCAP Leasing (VIC.) Pty Ltd
ANZCAP Leasing Services Pty Ltd
Asset Rentals Pty Ltd
Avco Access Pty Ltd
BMW Australia Finance Limited
Capital Finance Australia Limited
Capital Motor Finance Limited
Esanda Finance Corporation Limited
Ford Credit Australia Limited
GE (Finance) Pty Ltd
GE Automotive Financial Services
GE Mortgage Solutions Limited
GE Personal Finance Pty Ltd
General Motors Acceptance Corporation, Australia
GMAC, Australia (Finance) Limited
Mercantile Credits Pty Ltd
Orix Australia Corporation Limited
PRIMUS Automotive Financial Services Australia Limited
TFA (Wholesale) Pty Ltd
Toyota Finance Australia Ltd
Part 2
APRA may determine in writing that a registered entity listed in Part 1 of this Schedule is not a relevant registered entity if APRA considers that the entity is not a substantial provider of personal finance in Australia.
APRA may determine in writing that a registered entity that is not listed in Part 1 of the Schedule is a relevant registered entity if APRA considers that the entity is a substantial provider of personal finance in Australia.
In considering, for the purposes of clause 1 or 2, whether a registered entity is a substantial provider of personal finance in Australia, APRA shall have regard to whether the amount of personal finance provided in Australia by the entity is comparable to the registered entities, or other registered entities, listed in the Schedule.
Reporting Form RRF 394.0
Personal Finance
Instruction Guide
The purpose of this survey is to provide monthly statistics on the provision of finance to individuals for personal (non-business) use. The statistics are used by APRA for regulatory purposes, and may be provided to the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS) for policy and statistical purposes. Published aggregate statistics from this collection are used for research and policy formulation by economists, State and Federal Governments and the housing industry.
A separate form for personal finance in all eight states should be completed:
RRF 394.0.1 Personal Finance in NSW;
RRF 394.0.2 Personal Finance in VIC;
RRF 394.0.3 Personal Finance in QLD;
RRF 394.0.4 Personal Finance in SA;
RRF 394.0.5 Personal Finance in WA;
RRF 394.0.6 Personal Finance in TAS;
RRF 394.0.7 Personal Finance in NT; and
RRF 394.0.8 Personal Finance in ACT.
General directions and notes
Reporting entity
This form is to be completed for the Domestic books reporting entity. For corporations registered under the Financial Sector (Collection of Data) Act 2001 (e.g. finance companies and general financiers), report consolidated figures for all related corporations within the same Registered Financial Corporation (RFC) category.
Reporting period
The information provided should be for the month up to and including the last day of the month. This form is to be reported as at the last day of the reporting period. All RFCs should submit the completed form to APRA within 10 business days of the end of the month.
Unit of measurement
All RFCs are asked to complete the form in thousands of Australian dollars rounded to the nearest whole number (no decimal place).
Amounts denominated in foreign currency are to be converted to AUD using the spot exchange rate effective as at the reporting date.
Basis of preparation
Unless otherwise specifically stated, information reported on this form should comply with Australian accounting standards.
Definitions
A separate form for personal finance in all eight states should be completed. Where the entity has no activity in any state, check the “nil form” box. The form requests details of new commitments to provide personal finance to individuals for personal (non-business) use. Only the Australian activities of the business should be included on the form. If exact figures are not available please provide careful estimates. Please note that the items listed under ‘Include’ and ‘Exclude’ are examples and should not be taken as a complete list of items to be included or excluded.
What is a “commitment”?
A commitment is a firm offer to provide finance which has been accepted by the client. A commitment generally exists once a loan application has been approved, and a loan contract or letter of offer has been issued to the borrower.
With the exception of unsecured loans for alterations and additions (Question 6) and unsecured loans for owner-occupied housing (Question 7), commitments are to be reported regardless of whether they are secured or unsecured and, if secured, regardless of the type of security.
Include:
new lending commitments which have also been cancelled during the month;
commitments to provide finance to your employees; and
commitments for revolving credit loans secured by mortgage (mortgage backed overdrafts) on residential properties where the stated purpose at application is as a personal line of credit (see III. Home Equity Loans - Guidelines).
Exclude:
commitments to non-residents;
commitments to secured loans for the construction or purchase of dwellings intended for owner occupation or for alterations and additions to owner-occupied dwellings, which should be reported on RRF 392.0 Housing Finance (RRF 392.0);
commitments to individuals for use in connection with a business carried on by them, which should be reported on RRF 391.0 Commercial Finance (RRF 391.0); and
commitments for revolving credit loans secured by mortgage where the primary purpose at application is for the purchase of owner-occupied residential property (see III. Home Equity Loans).
What is a ‘dwelling’?
A dwelling is a place of residence which is:
contained in a building which is an immobile structure;
private (i.e. not generally accessible to the public); and
self-contained (i.e. includes bathing and cooking facilities).
Specific instructions
Part A: Commitments for fixed loans - By purpose
The purpose of the loan is that specified by the borrower. Multi-purpose loans should be split and each component reported in the appropriate purpose classification. Where this is not possible, the whole loan should be classified to the major purpose.
Fixed loans generally involve:
a commitment for a fixed period for a specific purpose; and
repayments over that fixed period which reduce the loan, but do not make further finance available.
Purchase of motor cars
Include:
cars, station wagons, 4WD and forward control passenger vehicles/vans.
Exclude:
trucks, buses, special vehicles, utilities, panel vans (include in Question 3); and
motor cycles/scooters (include in Question 2).
Purchase of other motor vehicles
Include:
trucks, buses, special vehicles, utilities and panel vans.
Exclude:
motor cycles/scooters (include in Question 2).
Unsecured loans for alterations and/or additions to dwellings
Include:
all structural and non-structural changes to dwellings (e.g. garages, carports, pergolas, re-roofing, re-cladding etc).
Exclude:
repairs and maintenance, swimming pools, and other home improvements that do not involve building work (include in Question 13).
Debt consolidation
Include:
commitments where the principal purpose is to consolidate and pay out amounts owing by borrowers to third parties.
Exclude:
commitments for the principal purpose of refinancing existing personal loans (include in Question 11).
Refinancing
Include:
commitments for the principal purpose of refinancing existing personal loans.
Exclude:
commitments where the principal purpose is to consolidate and pay out amounts owing by borrowers to third parties (include in Question 9); and
refinancing of personal investment loans (include in Question 12).
Loans for personal investment purposes
12a.Dwellings for rent/sale
Include:
only commitments for dwellings to be occupied by persons other than the owner.
12b.Other personal investments
Include:
commitments for the purchase of shares and other investment assets..
12c.Refinancing
Include:
refinancing of loans for personal investments, e.g. purchase of shares and other investment assets, purchase of dwellings for rent/resale.
Exclude:
refinancing of personal loans for the purposes listed in Question 1-10 and Question 13, these should be reported in Question 11.
Other
Include:
commitments for swimming pools and home improvements (other than alterations and additions), motor accessories and any other purpose not covered above.
Part B: New commitments for revolving credit loans
Revolving credit facilities involve a commitment for a credit or borrowing limit and where the extent of the borrowings used at any one time may be for any amount up to the authorised limit. Repayments (other than of charges and/or interest) reduce the borrowings thereby increasing the amount of unused credit available e.g. overdraft limits, secured revolving credit facilities (mortgage backed overdrafts), credit card facilities and other personal lines of credit.
New credit limits and increases to existing credit limits approved during the month
15a.Secured
Include:
mortgage backed overdrafts where the primary purpose of the commitment at application is NOT owner-occupied residential property. (see III. Home Equity Loans – Guidelines).
Exclude:
mortgage backed overdrafts where the primary purpose of the commitment at application is owner-occupied residential property (report on RRF 392.0 Housing Finance (RRF 392.0)) (see III. Home Equity Loans – Guidelines).
Cancellations of and reductions in previously approved credit limits
Include:
the actual value of credit limits cancelled and the value by which existing credit limits were reduced during the month.
Exclude:
amounts used as balancing or adjustment items (such as adjustments between states). These should be reported in Question 19; and
repayments which reduce the used portion of the credit facility, but not the total credit available. These should be excluded from the form altogether.
Balancing item (+/-)
If the previous month’s ‘total credit limits available’ (Q16 last month) plus (+) ‘total new limits approved’ (Q15c) minus (-) ‘cancellations’ (Q18) does not equal the current month’s ‘total credit limits available’ (Q16), please provide the amount and reason for this discrepancy.
Part C: Comments
Please provide comments
on any of the information you have supplied on this form;
on any questions which caused problems; and
if you would like to suggest improvements to this form.
Home equity loans - guidelines
Introduction
The increasing use of home equity loan products by individual (household sector) borrowers as a source of funding has necessitated some additional clarity in how these products should be treated in reporting to RRF 392.0 and RRF 394.0 Personal Finance (RRF 394.0). Please contact APRA for further advice on these guidelines.
Home equity loans
A home equity loan is a secured revolving credit facility which is secured by the borrower's equity in the home. In effect, the assets of the borrower (in equity in the home) are freed up so as other activities may be funded.
A home equity loan may be taken to fund a range of activities, including the purchase of a property (for owner-occupation), the refinancing of the borrower's existing home (as for all home loan refinancing, this would only be reported if the refinancing involved changing the lender), or any other activity - investment purchases (shares or property), household consumption spending (cars, boats, holidays) or working capital for a small business. A feature of home equity loans which causes reporting difficulties for lenders is that often the borrower intends to use the home equity loan for a combination of the purposes mentioned.
Reporting of home equity loans on RRF 392.0 and RRF 394.0
Attach one of two major (or primary) purposes to each home equity loan commitment- either "Housing" (for Owner-occupation) or "Other" (than housing for owner-occupation).
Primary purpose "Housing" commitments to be reported under Question 10 (Part C) - secured revolving home loans - on RRF 392.0.
Primary purpose "Other" commitments to be reported as secured personal revolving credit (Question 15) on RRF 394.0, with all drawdowns, re-payments and re-borrowing of principal in subsequent months to be reflected in the value of credit used (Question 17).
Where it is not possible to isolate the credit used (Question 17) for RRF 394.0 on a sub-group of all home equity loan commitments, then some manipulation must be undertaken to ensure the reported value of credit used is conceptually consistent with the total value of used and unused credit (Question 16), and previously reported values of new revolving credit commitments on RRF 394.0.
The intention of the table which forms Question 1a-1e on RRF 392.0 is to monitor the total "stock" of all commitments not advanced. New commitments to lend are added to the stock while advances of commitments and cancellations are removed from the stock. With a fixed term amortising loan, the commitment is either advanced when the finance is settled, or the commitment lapses and is cancelled. Where only part of the initial commitment is advanced, then it may be necessary to report a value advanced and a value cancelled, so that the (previously reported) commitment is wholly removed from the stock of all commitments not advanced. Some lenders may not cancel lapsed commitments until many months after the commitment is made. We prefer that lapsed commitments are reported as cancellations as regularly as possible. Once a commitment is cancelled or advanced, it plays no further role in the table in Questions 1a-1e of RRF 392.0.
The treatment of home equity loan commitments in Questions 1a-1e is problematic. Given that a home equity loan commitment will be reported for RRF 392.0 only if its primary purpose is the purchase of owner-occupied housing, it is reasonable to assume that the majority of the commitment will be advanced in a comparable timeframe as for a regular standard variable loan commitment. As for all new commitments, the new home equity loan commitment should be added to the stock of undrawn commitments (Question 1b). Any amount advanced (for the purchase of owner-occupied housing) in the same or subsequent months should be reported as an advance (Question 1c); at the same time the balance of the commitment (if any) reported as a cancellation (Question 1d). The home equity loan commitment (like all housing finance commitments) will take no further part in reporting to RRF 392.0.
Where it is impossible to identify the timing of the drawdown of a home equity loan for the purchase of owner-occupied housing, it is acceptable to assume that the entire value of the commitment is drawn down in the month of the commitment, so that the internal consistency of the Question 1 is preserved.
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