Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2015

Administered by Department of the Treasury

Legislation au F2015L00172 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 2 of 2015

 

Information provided by banks under certain reporting standards

 

 

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Australian Prudential Regulation Authority Act 1998 (APRA Act), s 57

The purpose of the Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2015 (Determination No. 2) made on 17 February 2015 is to enable APRA to disclose certain information provided by banks to APRA under the reporting standards listed in the Appendix. Releasing this information will be of use to regulators, policymakers, industry, researchers, analysts and other interested parties.

Legislative background

Subsection 56(5C) of the APRA Act provides that it is not an offence against s 56(2) of that Act to disclose information in a reporting document given to APRA under s 13 of the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act) where APRA has determined, under s 57, that the document does not contain confidential information.

S 57 of the APRA Act gives APRA power to determine whether a document given under s 13 of the Collection of Data Act contains confidential information.  The section provides that before doing so APRA must give relevant entities or bodies, or their representative association, a reasonable opportunity to make representations as to whether information of the kind contained in the document is confidential, and take such representations into account (the consultation undertaken is discussed below).

Information covered by the determination 

Determination No. 2 provides that information given to APRA under the reporting standards listed in the Appendix (made under s 13 of the Collection of Data Act), being information received on or after the date of APRA’s last determination under s 57 in respect of information provided under the reporting standards listed in the Appendix and prior to the date of Determination No. 2, is non-confidential.  Determination No. 2 applies to all banks that have submitted data under the reporting standards listed in Attachment A.

Consultation

In accordance with s 57, APRA issued a consultation letter to all banks on 4 July 2012, as well as providing a link to this consultation letter on its website. The consultation letter provided all affected entities an opportunity to make representations on the proposed determination of confidentiality. This consultation period ended on 31 July 2012.

There were eight responses received from entities during the consultation. Of these, four supported or had no objections to the proposed determination and four raised concerns with the proposed determination.

The support for the proposed determination noted the benefits of increased transparency of information. Also highlighted were the general benefits of more relevant and useful data collections.

The main opposition noted in the consultation submissions concerned the potential ability of a data user to assess a bank’s performance outside Australia and transactions between a bank and its clients.

APRA considers, after taking affected entities’ representations into account, that Determination No. 2 not only helps APRA fulfil its obligations to the Bank for International Settlements (BIS), the Reserve Bank of Australia (RBA) and the International Monetary Fund (IMF) but may also benefit regulated entities, other regulators, policymakers, the wider industry, researchers, analysts and other interested parties.

Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

A Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is Attachment B to this Explanatory Statement.
Attachment A

 

Determination No. 2 covers the following reporting standards:

 

  • ARS 231.1a International Exposures: Locational (Assets) Part 1
  • ARS 231.1b International Exposures: Locational (Liabilities) Part 1
  • ARS 231.2 International Exposures: Locational Part 2
  • ARS 231.3a International Exposures: Consolidated (Domestic Entity)
  • ARS 231.3b International Exposures: Consolidated (Foreign Entity)


ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Australian Prudential Regulation Authority (confidentiality) determination

No. 2 of 2015

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instrument listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

 

The purpose of making this legislative instrument is to enable APRA to release the BIS International Exposures report, which will contain data in respect of December 2014.

 

Human rights implications

 

APRA has assessed Determination No. 2 against the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act) and determined that only Article 17 of the International Covenant on Civil and Political Rights (ICCPR) is conceivably of relevance to Determination No. 2.

Article 21 of the ICCPR prohibits the arbitrary or unlawful interference with a person’s privacy, family, home and correspondence, and attacks on reputation. Article 21 is exclusively concerned with prohibiting interference with the privacy and/or reputation of individual persons. It does not extend to the privacy and/or reputation of corporate entities.

Determination No. 2 will facilitate the disclosure of specific information provided to APRA by banks in accordance with certain reporting standards.  It does not involve the disclosure of information directly relating to individual persons. Further, APRA reviews all releases of data received under reporting standards to ensure that no information pertaining to an individual person can be deduced from the data.

Consequently, Determination No. 2 does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the HRPS Act.

 

Conclusion

 

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2015 was introduced to address the need for greater transparency and the sharing of financial data among regulators, policymakers, and other stakeholders. Enacted under the Australian Prudential Regulation Authority Act 1998 (APRA Act), the determination was made by the Australian Prudential Regulation Authority (APRA) on 17 February 2015. This legislative instrument aims to facilitate the disclosure of certain information provided by banks to APRA, as stipulated under specific reporting standards, while ensuring that such disclosures do not compromise the confidentiality of sensitive information. The policy objective is to enhance the effectiveness of financial sector regulation and policymaking by providing useful and relevant data to a wide range of stakeholders, including international bodies such as the Bank for International Settlements, the Reserve Bank of Australia, and the International Monetary Fund.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2015 (Determination No. 2) applies to all banks that have submitted data under the specified reporting standards listed in the appendix, which pertain to international exposures. The purpose of this determination is to enable the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by these banks, thereby increasing transparency and utility for regulators, policymakers, industry, researchers, analysts, and other interested parties. The determination is made under subsection 56(5C) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) and applies to information given to APRA under the reporting standards listed in the appendix, specifically information received after APRA’s last determination under section 57 in respect of the same reporting standards and prior to the date of Determination No. 2. APRA consulted with all banks before making this determination, giving them a reasonable opportunity to make representations as to whether the information in question is confidential. While some concerns were raised regarding the potential assessment of a bank’s performance outside Australia and transactions between a bank and its clients, APRA concluded that the benefits of increased transparency outweigh these concerns, particularly in fulfilling obligations to international bodies such as the Bank for International Settlements, the Reserve Bank of Australia, and the International Monetary Fund.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 2 of 2015 (Determination No. 2) was made under section 57 of the Australian Prudential Regulation Authority Act 1998 (APRA Act) to enable the disclosure of specific information provided by banks to the Australian Prudential Regulation Authority (APRA) under certain reporting standards. The information covered by this determination includes data related to international exposures of banks, such as locational and consolidated exposures, as outlined in the appendix (paragraphs 1-3). This determination aims to enhance transparency and provide useful data to various stakeholders, including regulators, policymakers, industry participants, researchers, and analysts (paragraph 4). In line with section 57 of the APRA Act, APRA consulted with relevant entities before making this determination. This consultation involved issuing a letter to all banks on 4 July 2012 and providing an opportunity for them to make representations regarding the proposed determination. The consultation period concluded on 31 July 2012, with eight responses received from affected entities. Of these, four supported or had no objections to the proposed determination, while four raised concerns about the potential impact on a bank's performance and transactions with clients (paragraphs 5-8). After considering the representations, APRA concluded that Determination No. 2 would help it meet its obligations to international organisations such as the Bank for International Settlements (BIS), the Reserve Bank of Australia (RBA), and the International Monetary Fund (IMF), and it may benefit regulated entities, other regulators, policymakers, the wider industry, researchers, analysts, and other interested parties (paragraph 9). Determination No. 2 imposes no specific obligations or requirements on the parties or entities it governs, as it merely enables the disclosure of certain information provided by banks to APRA under specific reporting standards. However, APRA is responsible for ensuring that any released information does not pertain to individual persons and that it reviews all data releases to maintain confidentiality and privacy. The determination applies to all banks that have submitted data under the reporting standards listed in the appendix (paragraphs 10-12). There are no specific offences, penalties, or consequences for breach mentioned in the Determination No. 2. However, the APRA Act contains provisions for penalties in cases of non-compliance with its requirements. For example, under section 56 of the APRA Act, it is an offence to contravene any provision of the APRA Act or regulations made under that Act. The penalties for such offences may include fines, imprisonment, or both, depending on the severity of the offence. However, these penalties would not apply specifically to breaches of Determination No. 2 but rather to non-compliance with the broader APRA Act and its regulations (paragraphs 13-15).

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