Australian Prudential Regulation Authority (confidentiality) determination No. 4 of 2013

Administered by Department of the Treasury

Legislation au F2013L00429 Not in force Legislative Instrument

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Australian Prudential Regulation Authority (confidentiality) determination

No. 4 of 2013

 

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. 4 of 2013 (Determination No. 4) made on 4 March 2013 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. 4 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. 4, is non-confidential.  Determination No. 4 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. 4 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

APRA has assessed Determination No.4 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. 4.

Article 17 of the ICCPR prohibits the arbitrary or unlawful interference with a person’s privacy, family, home and correspondence, and attacks on reputation. Article 17 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. 4 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. 4 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. Accordingly, in APRA’s assessment, this legislative instrument is compatible with human rights.
Appendix

 

Determination No. 4 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. 4 of 2013 was enacted to facilitate the disclosure of specific information provided by banks to the Australian Prudential Regulation Authority (APRA) under certain reporting standards, thereby addressing the need for transparency and data usefulness for regulators, policymakers, industry stakeholders, researchers, analysts, and other interested parties. The determination, made under section 57 of the Australian Prudential Regulation Authority Act 1998, ensures that information provided by banks under specified reporting standards is deemed non-confidential and can be disclosed, subject to APRA's consultation with relevant entities. This legislative instrument aims to support APRA's obligations to international organisations such as the Bank for International Settlements, the Reserve Bank of Australia, and the International Monetary Fund, while also potentially benefiting regulated entities and the broader industry. The consultation process, which concluded with mixed feedback from entities, was considered in APRA's decision, ultimately determining that the benefits of increased transparency outweigh the concerns raised.

Scope and Application

The Australian Prudential Regulation Authority (confidentiality) determination No. 4 of 2013 applies to all banks that have submitted data under the specified reporting standards listed in the Appendix, which includes information on international exposures related to assets, liabilities, and consolidated entities. This determination, made under section 57 of the Australian Prudential Regulation Authority Act 1998, enables the Australian Prudential Regulation Authority (APRA) to disclose certain information provided by banks that is deemed non-confidential. The purpose of this determination is to enhance transparency and provide useful data to regulators, policymakers, industry, researchers, analysts, and other interested parties while ensuring that the disclosure of such information does not breach any confidentiality obligations. APRA has considered submissions from affected entities during the consultation period, taking into account their views on the potential benefits and concerns regarding the disclosure of such information. The determination specifically excludes any information that could pertain to individual persons, thereby ensuring compliance with human rights considerations under the relevant international instruments.

Key Provisions

The Australian Prudential Regulation Authority (confidentiality) determination No. 4 of 2013 (Determination No. 4) was made to enable the Australian Prudential Regulation Authority (APRA) to disclose specific information provided by banks under certain reporting standards. This determination was intended to benefit regulators, policymakers, industry, researchers, analysts, and other interested parties by increasing the transparency of financial information. The determination applies to information provided by banks under the reporting standards listed in the Appendix, which include details about international exposures such as locational assets and liabilities, and consolidated international exposures (sections 1 and 2 of the Appendix). APRA imposed obligations on the banks, giving them a reasonable opportunity to make representations regarding the confidentiality of the information before the determination was made. This consultation period ended on 31 July 2012, and eight responses were received. 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 assessment outside Australia and the transactions between banks and their clients (section 3). APRA considered these representations and concluded that the benefits of increased transparency outweighed the concerns raised. Regarding penalties and consequences, the Determination No. 4 itself does not impose specific penalties for breach. However, the underlying legislation, the Australian Prudential Regulation Authority Act 1998 (APRA Act), outlines various provisions related to breaches of confidentiality. Section 56 of the APRA Act states that it is an offence to disclose confidential information, with potential criminal penalties for individuals. Under section 56(5C), however, if APRA has determined that certain information is not confidential, then the disclosure of such information is not considered an offence. The maximum penalties for offences under the APRA Act can include substantial fines and imprisonment terms, although these penalties pertain to broader confidentiality breaches and not specifically to the disclosures authorised by Determination No. 4.

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