EXPLANATORY STATEMENT
Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2019
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 2019 and relates to the 2019-20 financial year. The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2018 is repealed upon commencement of this determination.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.
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 2019-20 financial year is $45,000.
The finance sector has been consulted on the 2019-20 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 4 June 2019. 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 2019
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 2019, made under the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998, introduces a levy for the 2019-20 financial year on authorised non-operating holding companies in the general insurance and authorised deposit-taking institution sectors. This determination was enacted to address the need for regulatory oversight and financial contribution from these entities to ensure the stability and integrity of the financial sector. The levy amount for this financial year is set at $45,000, determined by the Treasurer in accordance with the Act, and supersedes the previous year's levy. The legislation aims to maintain the financial health of the sector while ensuring that authorised non-operating holding companies contribute to the regulatory costs associated with their oversight.
Scope and Application
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2019 applies to authorised non-operating holding companies within the general insurance and authorised deposit-taking institution sectors in Australia. The Act, which governs these entities, mandates the Treasurer to determine the amount of levy payable by these companies for a financial year. The determination sets the levy at $45,000 for the 2019-20 financial year and comes into effect on 1 July 2019, replacing the previous year's determination. This legislation imposes a financial obligation on NOHCs, which must comply with the specified levy amount as set out by the Treasurer. The determination extends to all authorised non-operating holding companies operating within the designated sectors across Australia, ensuring uniformity and compliance with federal regulations. There are no specific exclusions or exemptions detailed within the text, though the regulatory impact statement and human rights compatibility statement suggest that the levy is a standard part of regulatory oversight without infringing on human rights.
Key Provisions
The Authorised Non-operating Holding Companies Supervisory Levy Imposition Determination 2019 (subsection 7(1)) specifies that the amount of levy payable by a non-operating holding company (NOHC) in the general insurance and authorised deposit-taking institution sectors for the 2019-20 financial year is $45,000. This determination, which commences on 1 July 2019, effectively replaces the previous determination from 2018 and ensures that any obligations or liabilities incurred in prior financial years remain valid. It is a legislative instrument under the Legislation Act 2003 and is consistent with section 7 of the Acts Interpretation Act 1901.
The Act imposes several obligations on authorised non-operating holding companies. Primarily, these entities are required to pay the specified levy as determined by the Treasurer for the relevant financial year. The levy is intended to cover the costs associated with the supervision and regulation of these companies. Furthermore, NOHCs must ensure they comply with all other relevant legislative requirements and cooperate with the Australian Prudential Regulation Authority (APRA) in its regulatory functions. The determination also mandates that NOHCs maintain records and provide any necessary information to APRA as part of their regulatory oversight.
Breach of the requirements stipulated in the Act can lead to civil or criminal consequences. Although the specific penalties are not detailed within the determination itself, under the Authorised Non-operating Holding Companies Supervisory Levy Imposition Act 1998, non-compliance with the levy requirements could result in financial penalties. Additionally, if a NOHC fails to meet its regulatory obligations or provide required information to APRA, it may face further enforcement actions, including fines or other regulatory sanctions. The exact penalties would be determined based on the nature and severity of the breach, in accordance with the relevant sections of the Act and other applicable legislation.