Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Act 2020

Overview

The Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Act 2020 was enacted by the Parliament of Australia to address the issue of funding for the Australian Prudential Regulation Authority (APRA). This Act amends the Australian Prudential Regulation Authority Act 1998 by introducing a new framework for determining the amount of levy money payable to the Commonwealth to cover certain costs incurred by APRA. The primary objective of this legislation is to ensure that APRA has a sustainable and predictable funding mechanism to support its regulatory functions effectively. The changes made by this Act apply to determinations made under the Australian Prudential Regulation Authority Act 1998 on or after the commencement of this legislation.

Scope and Application

The Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Act 2020 applies to the Australian Prudential Regulation Authority Act 1998, specifically altering the provisions regarding the determination of Commonwealth costs associated with the regulation and supervision of financial institutions. This Act affects leviable bodies, which include authorised deposit-taking institutions, authorised market operators, and other entities as specified in the Financial Institutions Supervisory Levies Collection Act 1998. The changes introduced by this Act are applicable on a national level, impacting the financial sector across Australia. The Act commenced on 20 June 2020, the day after receiving Royal Assent, and applies to determinations made for financial years on or after this date. The Act does not specify any exclusions or exemptions but mandates that the Minister make determinations by legislative instrument, ensuring the costs associated with regulatory activities are clearly defined and allocated. The scope of the Act is further extended through subordinate instruments, which may provide additional details or adjustments as necessary.

Key Provisions

The Australian Prudential Regulation Authority Amendment (APRA Industry Funding) Act 2020 amends the Australian Prudential Regulation Authority Act 1998 (APRA Act). The main changes are found in Schedule 1, which provides specific amendments to the APRA Act. Subsection 50(1) of the APRA Act is repealed and replaced with new provisions that require the Minister to make a determination for each financial year, specifying the amount of the levy money payable to the Commonwealth (subsection 50(1)(a) and (b)). This determination covers costs incurred in connection with supporting the integrity and efficiency of markets, promoting the interests of consumers, administering compassionate release of benefits, governing and maintaining the superannuation transactions network, and costs relating to the regulation of leviable bodies (subsection 50(1)(a)(i)-(v) and 50(1)(b)(i)-(v)). Under the amended APRA Act, the obligations and requirements imposed on parties or entities include that the Minister must now make these determinations annually, ensuring that the levies cover specific costs related to the regulation and administration of the superannuation sector. The term "leviable body" is now defined to have the same meaning as in the Financial Institutions Supervisory Levies Collection Act 1998 (subsection 50(6)). This ensures consistency in the interpretation of who is subject to these levies. The amendments apply to determinations made on or after the commencement of this Act, which is the day after Royal Assent on 20 June 2020. The Act does not explicitly detail offences, penalties, or consequences for breach in the text provided. However, it is reasonable to infer that failure to comply with the Minister's determinations regarding the levies could result in legal repercussions under the APRA Act or other related legislation. Typically, breaches of regulatory requirements can lead to enforcement actions, which may include fines, legal proceedings, or other administrative penalties. The maximum penalties for such breaches would be determined by the specific provisions of the APRA Act or other relevant legislation.