EXPLANATORY STATEMENT
Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016
This determination relates to a levy imposed by the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 (the Act) on authorised non‑operating holding companies (NOHC) in the general insurance and authorised deposit‑taking institution sectors.
This determination commences on 1 July 2016 and relates to the 2016-17 financial year. The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2015 is repealed upon commencement of this determination. Consistent with section 7 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.
The determination will commence before it is registered. Commencement prior to registration, however, does not disadvantageously affect the rights of any person as at the date of registration or impose any liability on any person in respect of anything done or omitted to be done before the date of registration. Commencement prior to registration is therefore consistent with subsections 12(2) and 12(3) of the Legislation Act 2003.
Subsection 7(1) of the Act requires the Treasurer to determine, by legislative instrument, the amount of levy payable by a NOHC for a financial year.
The determination provides that the amount of levy payable by a NOHC in relation to the 2016-17 financial year is $10,000.
The finance sector has been consulted on the 2016-17 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 6 May 2016. The paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA. Eight submissions were received during the consultation process, and no submission specifically raised issues in relation to the Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016.
The Office of Best Practice Regulation has previously advised that a Regulatory Impact Statement is not required as supervisory levies are considered machinery‑of‑government in nature.
This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 1.
Attachment 1
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
This determination relates to a levy imposed by the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 on authorised non‑operating holding companies in the general insurance and authorised deposit‑taking institution sectors.
Subsection 7(1) of the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 allows the Minister to determine the amount of levy payable by an authorised non‑operating holding company for a financial year.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016 was enacted to implement a levy on authorised non-operating holding companies (NOHC) within the general insurance and authorised deposit-taking institution sectors, as authorised by the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998. This Act was introduced to address the need for financial oversight and regulatory compliance within these sectors, ensuring that NOHCs contribute to the costs associated with their supervision. The determination was made by the Treasurer under the authority conferred by the Act and commenced on 1 July 2016 for the 2016-17 financial year, replacing the previous 2015 determination. The policy objective aligns with maintaining financial stability and regulatory integrity within the specified sectors, as evidenced by consultations with the finance sector and regulatory bodies such as the Australian Prudential Regulation Authority (APRA).
Scope and Application
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016 pertains to a levy imposed by the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 on authorised non-operating holding companies operating within the general insurance and authorised deposit-taking institution sectors. The Act applies specifically to these entities, imposing a financial obligation for the 2016-17 financial year, as determined by the Minister under subsection 7(1) of the Act. The levy amount set forth in this determination is $10,000, which was decided after consultations with the finance sector through a Treasury and Australian Prudential Regulation Authority discussion paper. The determination is applicable nationally, encompassing all authorised non-operating holding companies within the specified sectors across Australia, and it supersedes the previous determination from 2015. Notably, this legislative instrument does not create any new rights or freedoms and is deemed compatible with human rights as it does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011.
Key Provisions
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2016 (section 7(1)) sets out the amount of levy that authorised non-operating holding companies (NOHC) in the general insurance and authorised deposit-taking institution sectors must pay for the 2016-17 financial year. Specifically, the levy amount is set at $10,000. This determination comes into effect on 1 July 2016 and replaces the Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2015. Importantly, any obligations or liabilities incurred under the previous determination remain valid, consistent with section 7 of the Acts Interpretation Act 1901.
Authorised non-operating holding companies within the specified sectors are obligated to pay the specified levy amount for the financial year as determined. This requirement is directly derived from the provisions of the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998. Additionally, the levy must be paid in accordance with any other relevant regulations and guidelines issued by the Australian Prudential Regulation Authority (APRA) and the Treasury.
Failure to comply with the levy requirements set out in this determination may result in legal consequences. While the determination does not explicitly detail specific penalties or consequences for non-compliance, breaches of financial regulations generally carry substantial penalties under Australian law. This may include fines and legal action that could affect the financial standing and operations of the non-compliant NOHC. It is important for NOHCs to ensure compliance to avoid any potential enforcement actions by regulatory authorities.