Explanatory material to the APRA transitional prudential standards as at 1 July 1999
Note 1
The following provisions from the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999 are relevant to the APRA transitional prudential standards as at 1 July 1999:
3 Definitions
In these regulations:
Act means the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999.
AFIC means the Australian Financial Institutions Commission.
AFIC Code has the meaning given by item 1 of Schedule 8 to the Act.
APRA means the Australian Prudential Regulation Authority.
ASIC means the Australian Securities and Investments Commission.
authorised deposit-taking institution, or ADI, has the meaning given by section 5 of the Banking Act 1959.
FIC body has the meaning given by item 1 of Schedule 8 to the Act.
Financial Institutions Code has the meaning given by item 1 of Schedule 8 to the Act.
Friendly Societies Code has the meaning given by item 1 of Schedule 8 to the Act.
friendly society has the meaning given by item 1 of Schedule 8 to the Act.
FSR (State or Territory) Act means any of the following Acts of a State or Territory:
(a) the Financial Sector Reform (New South Wales) Act 1999 of New South Wales;
(b) the Financial Sector Reform (Victoria) Act 1999 of Victoria;
(c) the Financial Sector Reform (Queensland) Act 1999 of Queensland;
(d) the Acts Amendment and Repeal (Financial Sector Reform) Act 1999 of Western Australia;
(e) the Financial Sector Reform (South Australia) Act 1999 of South Australia;
(f) the Financial Sector Reform (Tasmania) Act 1999 of Tasmania;
(g) the Financial Sector Reform (ACT) Act 1999 of the Australian Capital Territory;
(h) the Financial Sector Reform (Northern Territory) Act 1999 of the Northern Territory.
replaced legislation has the meaning given by subitem 22 (7) of Schedule 8 to the Act.
SSA has the meaning given by item 1 of Schedule 8 to the Act.
transferring friendly society has the meaning given by item 10 of Schedule 8 to the Act.
Note Transfer date is defined in section 2 of the Act as the date that is, by Proclamation made by the Governor-General under subsection 3 (16) of the Act, specified as the transfer date for the purposes of the Act.
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Division 5.2 Prudential standards
11 Definitions for Division 5.2
In this Division:
APRA transitional prudential standard means a provision to which regulation 12 applies.
ASIC transitional standard has the meaning given by Schedule 12 to the Corporations Regulations 1990.
excluded standard means a provision of the Prudential Notes and Prudential Standards, issued by AFIC under Part 4 of an AFIC Code, that is not an APRA transitional prudential standard or an ASIC transitional standard.
transferring financial institution of this jurisdiction has the meaning given by Part 1 of Schedule 4 to the Corporations Law.
12 APRA transitional prudential standards
Each provision set out in Schedule 1 is an APRA transitional prudential standard that is to be administered by APRA.
Note Some of the provisions are also administered by ASIC under the Corporations Regulations 1990.
13 Application of APRA transitional prudential standards
(1) This regulation applies if:
(a) immediately before the transfer date:
(i) a body was an FIC body; and
(ii) a provision mentioned in Schedule 1 had effect in relation to the FIC body; and
(b) on the transfer date, the body becomes an ADI.
(2) The provision continues to have effect in relation to the ADI, after the transfer date, as an APRA transitional prudential standard.
14 Application of instruments under APRA transitional prudential standards
(1) This regulation applies if:
(a) immediately before the transfer date:
(i) a body was an FIC body; and
(ii) a provision had effect in relation to the FIC body; and
(iii) an instrument made by AFIC or an SSA under the provision was in force; and
(b) on the transfer date:
(i) the body becomes an ADI; and
(ii) the provision becomes an APRA transitional prudential standard.
Examples of instruments
An approval, determination, direction, exemption or notice.
(2) The instrument has effect in relation to the ADI, after the transfer date, as if it were an instrument made by APRA under the APRA transitional prudential standard.
15 Interpretation of APRA transitional prudential standards and instruments
(1) This regulation applies to an APRA transitional prudential standard, or an instrument to which regulation 14 applies, that refers to any of the following:
(a) AFIC or an SSA;
(b) a power exercised by AFIC or an SSA;
(c) an excluded standard;
(d) the Financial Institutions Code, a provision of that Code, or a provision of an instrument that was made under a provision of that Code.
(2) A reference to AFIC or an SSA is to be read as if it were a reference to APRA.
(3) A reference to a power exercised by AFIC or an SSA is to be read as if it were a reference to a power exercised by APRA under the APRA transitional prudential standard, the Act, or another law of the Commonwealth that is equivalent to the power.
(4) A reference to any other matter mentioned in subregulation (1) is to be read in a way that:
(a) is consistent with, and promotes, the transitional arrangements made by the Act and these regulations; and
(b) is consistent with APRA’s powers, functions and responsibilities; and
(c) does not alter the interpretation or operation of an APRA transitional prudential standard.
16 Variation, revocation and modification of APRA transitional prudential standards and instruments
(1) APRA may, in writing, vary, revoke or modify:
(a) an APRA transitional prudential standard; or
(b) the application of an APRA transitional prudential standard; or
(c) an instrument to which regulation 14 applies.
(2) However, APRA must act in the way described in subsections 11AF (4) to (6A) (inclusive) of the Banking Act 1959 if it proposes to vary, revoke or modify:
(a) an APRA transitional prudential standard; or
(b) the application of an APRA transitional prudential standard.
(3) Also, APRA must consult with ASIC before taking any action to vary, revoke or modify:
(a) a standard that is also an ASIC transitional standard; or
(b) the application of a standard that is also an ASIC transitional standard; or
(c) an instrument that relates to a standard that is also an ASIC transitional standard.
(4) A failure to comply with subregulation (2) or (3) does not affect the validity of APRA’s action.
17 Relationship between APRA transitional prudential standards and the Banking Act 1959
For Division 1A, and Subdivision A of Division 1BA, of Part II of the Banking Act 1959, APRA may deal with an APRA transitional prudential standard as if it were a prudential standard made under section 11AF of that Act.
18 Inspection and purchase of APRA transitional prudential standards and instruments
(1) APRA must take reasonable steps to ensure that copies of the current text of APRA transitional prudential standards are available for inspection and purchase.
(2) APRA must take reasonable steps to ensure that copies of instruments to which regulation 14 applies are available for inspection and purchase.
(3) A failure to comply with subregulation (1) or (2) does not affect the validity or operation of an APRA transitional prudential standard or an instrument.
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Schedule 1 Transitional prudential standards administered by APRA
(regulation 12)
1. The following provisions of Book 3 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:
(a) Prudential Note 3.1;
(b) Prudential Standards 3.1.1 to 3.1.6 (inclusive);
(c) Prudential Note 3.2;
(d) Prudential Standards 3.2.1 to 3.2.7 (inclusive);
(e) Prudential Notes 3.3B and 3.3C;
(f) Paragraphs 3.3.2a and 3.3.2b of Prudential Standard 3.3.2;
(g) Prudential Standard 3.3.5, other than subparagraph 3.3.5a (ii);
(h) Prudential Standard 3.3.6;
(i) Prudential Notes 3.4A, 3.4C and 3.4E;
(j) Prudential Standards 3.4.1, 3.4.3 and 3.4.5;
(k) Prudential Note 3.6;
(l) Prudential Standards 3.6.1 to 3.6.7 (inclusive);
(m) Prudential Note 3.7;
(n) Prudential Standards 3.7.1 to 3.7.7 (inclusive).
2. The following provisions of Book 4 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:
(a) Prudential Note 4.1;
(b) Prudential Standards 4.1.1 to 4.1.6 (inclusive);
(c) Prudential Note 4.2;
(d) Prudential Standards 4.2.1 to 4.2.8 (inclusive);
(e) Prudential Notes 4.3B and 4.3C;
(f) Paragraphs 4.3.2a and 4.3.2b of Prudential Standard 4.3.2;
(g) Prudential Standard 4.3.5, other than subparagraph 4.3.5a (ii);
(h) Prudential Standard 4.3.6;
(i) Prudential Notes 4.4A, 4.4B and 4.4D;
(j) Prudential Standards 4.4.1, 4.4.2 and 4.4.4;
(k) Prudential Note 4.6;
(l) Prudential Standards 4.6.1 to 4.6.7 (inclusive);
(m) Prudential Note 4.7;
(n) Prudential Standards 4.7.1 to 4.7.7 (inclusive).
3. The following provisions of Book 5 of the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date:
(a) Prudential Note 5.1;
(b) Prudential Standards 5.1, 5.1.1, 5.1.2 and 5.1.3;
(c) Prudential Standards 5.1.4 and 5.1.5;
(d) Prudential Note 5.2;
(e) Prudential Standards 5.2.1 to 5.2.9 (inclusive);
(f) Prudential Notes 5.3B and 5.3C;
(g) Prudential Standard 5.3.5, other than subparagraph 5.3.5a (iii);
(h) Prudential Standard 5.3.6;
(i) Prudential Notes 5.4A, 5.4C, 5.4D, 5.4E, 5.4F and 5.4H;
(j) Prudential Standards 5.4.1, 5.4.3, 5.4.4, 5.4.5. 5.4.6 and 5.4.8;
(k) Prudential Note 5.5;
(l) Prudential Standards 5.5.1 to 5.5.8 (inclusive).
4. Attachment B to the Prudential Notes and Prudential Standards issued by AFIC under Part 4 of an AFIC Code, as in force immediately before the transfer date.
5. Subsections 237 (2), and 245 (1) to (3) (inclusive), of a Financial Institutions Code.
6. An urgent prudential standard, made under section 30 of an AFIC Code, that was in force immediately before the transfer date.
7. A modification of a transitional prudential standard, made under section 31 of an AFIC Code, that was in force immediately before the transfer date.
Note 2
On 29 June 1999, under subsection 3(16) of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1999, the Governor General specified 1 July 1999 as the transfer date (see Gazette 1999, S 283, 29 June 1999).
Note 3
The principal as registered does not include any temporary urgent prudential standard that may have been made under section 30 of an AFIC Code, or any temporary modification that may have been made under section 31 of an AFIC Code (as referred to in paragraphs 6 and 7 of Schedule 1 to the Financial Sector Reform (Amendments and Transitional Provisions) Regulations 1999).
Sections 30 and 31 of the AFIC Code provided as follows:
Urgent standards
30.(1) If the Board determines that it is necessary, because of urgent circumstances, for a resolution making, amending or repealing a standard to be passed without complying with section 29 (Procedures before making of standards), the Board may pass that resolution.
(2) When the Board makes a determination under subsection (1), it must immediately publish a copy of that determination in the Queensland Government Gazette, together with a succinct statement of its reasons for making the determination.
(3) A resolution made by virtue of a determination under subsection (1) has effect for only 120 days or, if a lesser period is specified in the resolution, that period.
Application of changed requirements
31.(1) A standard may provide that its operation in relation to a particular financial institution may be varied by a State supervisory authority by temporarily changing a requirement of the standard as allowed under the standard.
(2) This section does not by implication limit section 28 (Making etc. of standards).