Australian Prudential Regulation Authority (confidentiality) determination
No. 20 of 2015
Information provided by locally-incorporated banks and foreign ADIs under Reporting Standards ARS 231.1a, ARS 231.1b, ARS 231.2, ARS 231.3a and ARS 231.3b
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Australian Prudential Regulation Authority Act 1998, section 57
Acts Interpretation Act 1901, subsection 33(3)
Under paragraph 57(2)(b) of the Australian Prudential Regulation Authority Act 1998 (the APRA Act), APRA may determine, by legislative instrument, that all or a specified part of relevant reporting documents of a specified kind contain, or do not contain, confidential information.
On 9 December 2015, APRA made Australian Prudential Regulation Authority (confidentiality) determination No. 20 of 2015 (the instrument) which determines that a reporting document or part of a reporting document of a kind specified in the Schedule to the instrument does not contain confidential information.
The instrument also revokes a series of earlier determinations made by APRA under section 57 of the APRA Act. The instrument replaces and supersedes the determinations which are being revoked.
The instrument commences on the date of registration on the Federal Register of Legislative Instruments.
Legislative background
Subsection 56(2) of the APRA Act provides that it is an offence to disclose “protected information”[1] or a “protected document”[2], being information or documents provided to APRA under a “prudential supervision framework law”[3]. The Financial Sector (Collection of Data) Act 2001 (FSCOD Act) is a prudential supervision framework law, and the reporting documents specified in the Schedule to the instrument, having been provided to APRA by Authorised Deposit-taking Institutions (ADIs) under the FSCOD Act, are protected documents.
Subsection 56(5C) of the APRA Act provides that it is not an offence to disclose information in a reporting document given to APRA under section 13 of the FSCOD Act where APRA has made a determination under section 57 of the APRA Act in relation to the information.
Under subsections 57(2) and (4) of the APRA Act, APRA may, by legislative instrument, determine that:
(a) all or a specified part of a relevant reporting document does not contain confidential information; or
(b) all or a specified part of relevant reporting documents of a specified kind do not contain confidential information,
if, taking into account any representations made under subsection 57(3) in relation to the document or documents of that kind, APRA considers that the benefit to the public from the disclosure of the document or documents, or information contained in the document or documents, outweighs any detriment to commercial interests that the disclosure may cause.
Under subsection 57(3) of the APRA Act, APRA must not make a determination under subsection 57(2) unless APRA gives interested parties for the determination a reasonable opportunity to make representations as to whether or not the relevant reporting document contains, or relevant reporting documents of that kind contain, confidential information.
The consultation undertaken by APRA for the purposes of subsection 57(3) is discussed below.
Purpose and Operation of the Instrument
The instrument is made under section 57 of the APRA Act and subsection 33(3) of the Acts Interpretation Act 1901 in relation to information provided under the following Reporting Standards, taking into account both current and preceding versions of those 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)
(collectively referred to in this Explanatory Statement as the Reporting Standards)
The instrument also revokes a series of earlier determinations made by APRA under section 57 of the APRA Act.
The purpose of the instrument is to:
- replace and supersede the earlier determinations made under section 57 of the APRA Act in respect of the Reporting Standards; and
- make a new determination under paragraph 57(2)(b) of the Act which will enable APRA to disclose on an ongoing basis, including by way of publication in industry bulletins or releasing data to other regulators, certain information provided to APRA by ADIs under the Reporting Standards.
Information covered by the determination
The instrument provides that information given to APRA under the reporting documents listed in the instrument is non-confidential. Consequently, its release by APRA will be permitted under subsection 56(5C) of the APRA Act. The information will form the basis of statistical publications which will be of use to regulators, policymakers, industry, researchers, analysts and other interested parties.
Consultation
APRA issued a consultation letter to all Australian-resident banks and registered financial corporations (RFCs) on 4 July 2012, as well as providing a link to this consultation letter on its website. The consultation letter provided all relevant banks and RFCs an opportunity to make representations on the proposed determinations of confidentiality for data collected under the Reporting Standards. 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 determinations and four raised concerns with the proposed determinations.
The support for the proposed determinations 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 the instrument not only assists APRA to 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 contained in Attachment A to this Explanatory Statement.
ATTACHMENT A
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. 20 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 (HRPS Act).
Overview of the Legislative Instrument
The purpose of this Legislative Instrument is to:
- replace and supersede the earlier determinations made under section 57 of the APRA Act in respect of 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) and ARS 231.3b International Exposures: Consolidated (Foreign Entity) (collectively referred to in this Statement as the Reporting Standards); and
- make a new determination under paragraph 57(2)(b) of the Act which will enable APRA to disclose on an ongoing basis, including by way of publication in industry bulletins or releasing data to other regulators, certain information provided to APRA by ADIs under the Reporting Standards.
Human rights implications
APRA has assessed the Legislative Instrument against the international instruments listed in section 3 of the HRPS Act and determined that only Article 17 of the International Covenant on Civil and Political Rights (ICCPR) is conceivably of relevance.
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.
The Legislative Instrument will facilitate the disclosure by APRA of specific information provided by locally incorporated banks and foreign ADIs in accordance with the 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, the Legislative Instrument 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.
[1] Defined in s.56(1) of the APRA Act.
[2] Defined in s.56(1) of the APRA Act.
[3] Defined in s.3(1) of the APRA Act.