EXPLANATORY STATEMENT
Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2018
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 2018 and relates to the 2018-19 financial year. The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2017 is repealed upon commencement of this determination.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 commences, or is taken to have commenced, before it is registered.. However, commencement prior to registration, 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 2018-19 financial year is $45,000.
The finance sector has been consulted on the 2018-19 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 11 May 2018. The paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA. Six submissions were received during the consultation process, none of which related specifically to the methodology for this levy.
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 Legislation 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 2018
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 requires the Treasurer 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 2018, which commenced on 1 July 2018, imposes a levy on authorised non-operating holding companies (NOHC) within the general insurance and authorised deposit-taking institution sectors, as governed by the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998. This determination was enacted by the Parliament of Australia to address the need for supervisory levies on NOHCs to ensure the financial stability and regulatory compliance of these entities. The determination is a legislative instrument that mandates the Treasurer to set the amount of the levy, with the 2018-19 financial year levy set at $45,000. The policy objective is to impose a supervisory levy on NOHCs to fund the regulatory activities of the Australian Prudential Regulation Authority (APRA) and the Treasury, ensuring that these entities contribute to their oversight and regulation. The determination repeals the previous year's levy imposition and ensures that any obligations incurred before its commencement remain valid.
Scope and Application
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2018 applies to authorised non-operating holding companies (NOHC) within the general insurance and authorised deposit-taking institution sectors in Australia. The Act, enacted under the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998, imposes a supervisory levy on these NOHCs for the 2018-19 financial year, setting the levy amount at $45,000. The determination is a legislative instrument and therefore has legal effect upon commencement, which precedes its registration, without affecting any person's rights or imposing any liability for actions taken prior to registration. This approach adheres to the provisions of the Legislation Act 2003, ensuring that the commencement does not disadvantage any individual. The scope of the levy is confined to the specified sectors and financial year, and the Act does not include any specific exclusions or exemptions beyond those defined within the legislation. The determination is part of a broader regulatory framework that ensures compliance and oversight of financial institutions by the Australian Prudential Regulation Authority (APRA).
Key Provisions
The primary provision of this determination, under section 7(1) of the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998, mandates that the Treasurer determine the amount of the supervisory levy payable by authorised non-operating holding companies (NOHC) for a financial year. For the 2018-19 financial year, this determination sets the levy at $45,000. This levy applies to NOHCs within the general insurance and authorised deposit-taking institution sectors.
Entities governed by this Act, specifically authorised non-operating holding companies, must comply with the levy requirements stipulated in this determination. This includes ensuring that the correct amount of the supervisory levy is calculated and paid for the specified financial year. The levy is intended to cover the costs associated with the supervision and regulation of these entities.
Breach of the requirements set out in this determination can result in civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, it is known that penalties for breaches of financial legislation can include fines and, in severe cases, imprisonment. The exact penalties would be in accordance with the relevant provisions of the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998 and other applicable laws. The determination ensures that any obligations or liabilities incurred in previous financial years remain valid, thereby protecting the interests of all parties involved.