Overview

The Authorised Deposit-Taking Institutions Supervisory Levy Imposition Determination 2006 was enacted to establish the levy imposed on authorised deposit-taking institutions for the 2006-07 financial year, in accordance with the Authorised Deposit-Taking Institutions Supervisory Levy Imposition Act 1998. This Act was enacted to address the need for a regulatory framework to ensure the stability and soundness of authorised deposit-taking institutions, which play a crucial role in the financial sector. The determination, which commenced on 1 July 2006, revokes the previous year's levy determination and outlines the specific percentages and limits for both restricted and unrestricted levies applicable to different categories of authorised deposit-taking institutions, including foreign and specialist credit card institutions. The policy objective of the Act is to maintain a stable and efficient financial system by imposing a supervisory levy that is proportional to the size and risk profile of the institutions, thereby contributing to the cost of their supervision.

Scope and Application

The Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Determination 2006 applies to authorised deposit-taking institutions and is governed by the Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Act 1998. The determination specifies the levy rates for the 2006-07 financial year and sets out how these levies are to be calculated based on the assets held by the entities. It applies to foreign authorised deposit-taking institutions, specialist credit card institutions, and all other authorised deposit-taking institutions. The calculation of the levy includes a restricted component and an unrestricted component, with different rates applicable to different types of institutions. The levy is imposed by the Treasurer under the authority granted by the Act and is applicable nationally across Australia. The determination revokes the previous levy determination from the 2005-06 financial year, ensuring that all obligations and liabilities incurred in previous years remain valid. The calculation of an institution's asset value is also determined by this instrument, which is a legislative instrument under the Legislative Instruments Act 2003.

Key Provisions

The main operative sections of this determination, detailed in the Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Determination 2006, establish the specific levy amounts for the 2006-07 financial year for authorised deposit‑taking institutions. Section 7(3) allows the Treasurer to determine the maximum and minimum restricted levy amounts, the restricted and unrestricted levy percentages, and the method for calculating an institution's asset value. For the 2006-07 financial year, the restricted levy for foreign authorised deposit-taking institutions and specialist credit card institutions is set at 0.00230 per cent of their assets, with a minimum of $470 and a maximum of $700,000. The unrestricted levy for these institutions is 0.000555 per cent of their assets. For other authorised deposit-taking institutions, the restricted levy is set at 0.00460 per cent of assets, with a minimum of $470 and a maximum of $1,400,000, and the unrestricted levy is 0.000555 per cent of their assets. The determination imposes several obligations on the parties it governs. Primarily, authorised deposit-taking institutions are required to calculate their supervisory levy based on the provisions set out in the determination. This involves determining the percentage of their assets that will be subject to the restricted and unrestricted levies and ensuring that these calculations comply with the specified minimum and maximum limits. The determination also requires institutions to report their asset values accurately and to remit the calculated levy to the relevant authorities by the specified deadlines. Failure to comply with the requirements set out in the Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Determination 2006 may result in civil and criminal consequences. Under section 55 of the Authorised Deposit-taking Institutions Supervisory Levy Imposition Act 1998, an authorised deposit-taking institution that fails to comply with a provision of this Act, including the determination, is liable for a penalty of up to 50 penalty units for each day the contravention continues. Additionally, the failure to pay the supervisory levy by the due date may result in further penalties, including interest charges on the unpaid amount. In severe cases of non-compliance, the institution may also face prosecution, leading to more significant fines and potential imprisonment for responsible individuals.