Australian Prudential Regulation Authority (confidentiality) determination
No. 29 of 2012
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. 29 of 2012 (Determination No. 29) made on 17 December 2012 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. 29 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. 29, is non-confidential. Determination No. 29 applies to all banks that have submitted data under the reporting standards listed in the Appendix.
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. 29 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
The legislative instrument the subject of this explanatory statement does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Accordingly, in APRA’s assessment, this legislative instrument is compatible with human rights.
Appendix
Determination No. 29 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)
Overview
The Australian Prudential Regulation Authority (confidentiality) determination No. 29 of 2012 was enacted to facilitate the disclosure of certain information provided by banks to the Australian Prudential Regulation Authority (APRA) under specific reporting standards. This determination addresses the need to balance the confidentiality requirements of financial data with the broader benefits of transparency and data utility for regulators, policymakers, and other stakeholders. The Australian Prudential Regulation Authority Act 1998 (APRA Act), section 57, empowers APRA to determine whether information contained in documents submitted under the Financial Sector (Collection of Data) Act 2001 is confidential. After considering submissions from affected entities, APRA concluded that releasing this information would support its obligations to international bodies like the Bank for International Settlements, Reserve Bank of Australia, and the International Monetary Fund, while also benefitting various stakeholders by enhancing data transparency and utility.
Scope and Application
The Australian Prudential Regulation Authority (confidentiality) determination No. 29 of 2012 pertains to the disclosure of specific information provided by banks to the Australian Prudential Regulation Authority (APRA) under certain reporting standards. This determination aims to ensure that APRA can release information that will be beneficial to regulators, policymakers, industry stakeholders, researchers, analysts, and other interested parties, provided that it is deemed non-confidential. The determination applies to all banks that submit data under the specified reporting standards, which include various international exposure reporting requirements. APRA consulted with all affected entities, allowing them to make representations on the proposed determination of confidentiality before its finalisation. While some entities supported the increased transparency and usefulness of the data, others raised concerns about the potential impact on assessing a bank’s performance outside Australia and transactions between banks and their clients. Despite these concerns, APRA concluded that the determination would assist in fulfilling obligations to international organisations and benefit a broader range of stakeholders.
Key Provisions
The Australian Prudential Regulation Authority (confidentiality) determination No. 29 of 2012 (Determination No. 29) made under section 57 of the Australian Prudential Regulation Authority Act 1998 (APRA Act) allows APRA to disclose certain information provided by banks, which is covered under the reporting standards listed in the Appendix of the determination (s 56(5C)). This disclosure is intended to benefit various stakeholders including regulators, policymakers, industry, researchers, analysts, and other interested parties by increasing the transparency and usefulness of the data. The covered reporting standards include information on international exposures, both locational and consolidated, as detailed in the Appendix.
The obligations imposed by Determination No. 29 primarily concern the disclosure process. APRA is required to consult with relevant entities or bodies, or their representative association, before making a determination that certain information is non-confidential (s 57). This consultation ensures that all affected parties have an opportunity to make representations regarding the confidentiality of the information. Specifically, APRA issued a consultation letter to all banks on 4 July 2012 and provided a link to this letter on its website. The consultation period ended on 31 July 2012, allowing banks to submit their views on the proposed determination. Although APRA received eight responses, four supported or had no objections to the proposed determination, while the other four raised concerns, particularly about the potential for external assessment of a bank's performance and transactions between a bank and its clients.
There are no explicit offences, penalties, or civil/criminal consequences outlined in Determination No. 29 itself. However, the determination is made under the authority of the APRA Act, which contains provisions for penalties and sanctions in case of non-compliance with its provisions. The APRA Act, in section 56(2), specifies that it is an offence to disclose confidential information, and while this determination allows for the disclosure of certain information, it does not extend to information that is still considered confidential. The consequences of breaching the confidentiality provisions would therefore be determined by the APRA Act, which may include fines or other penalties as prescribed by law.
Overall, Determination No. 29 aims to facilitate the disclosure of certain non-confidential information to a broader audience, thereby enhancing the overall transparency and utility of the data provided to APRA. This is achieved through a structured consultation process and in compliance with the broader legislative framework provided by the APRA Act.