Banking exemption No. 2 of 2006

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority

Banking Act 1959 subsection 11(4)

Under subsection 11(1) of the Banking Act 1959 (the Act), APRA has power, by order published in the Gazette, to determine that all or specified provisions of the Act (other than section 63) do not apply to a person during the period while the order continues in force. Under subsection 11(4) of the Act, APRA may, by order published in the Gazette, vary or revoke an order already made.

Banking exemption No. 2 of 2006 (the amending instrument) varies Banking exemption No. 1 of 2006 (the principal instrument), which was made on 26 June 2006.

The amending instrument will come into force the first moment of the day following the day when it is registered on the Federal Register of Legislative Instruments.

1. Background

The principal instrument revoked a number of exemption orders and replaced them with a single exemption order applying to all religious charitable development funds.

Five omissions in relation to the principal instrument have been identified:

• On 7 August 2006, UCA Funds advised APRA that in addition to the UCA Cash Management Fund Limited, the UCA Growth Fund Limited and the Uniting Growth Fund Limited listed in Schedule 2 of the principal instrument, the Development Fund, The Uniting Church in Australia Property Trust (Victoria) and the Funeral Fund also comply with the conditions set out in Schedule 3 of the principal instrument and should therefore also be listed in Schedule 2. APRA considers that these additional funds meet all of the conditions set out in Schedule 3 of the principal instrument and should therefore also be listed in Schedule 2.
• On 24 July 2006, APRA received an application to include the UCA – Investment Fund (Presbytery of Canberra Region) in Schedule 2 of the principal instrument. APRA considers that the UCA – Investment Fund (Presbytery of Canberra Region) meets all of the conditions set out in Schedule 3 of the principal instrument and should therefore also be listed in Schedule 2.
• On 19 July 2006, APRA received an application to include the Uniting Church in Australia Synod of Western Australia Uniting Church Investment Fund in Schedule 2 of the principal instrument. APRA considers that the Uniting Church in Australia Synod of Western Australia Uniting Church Investment Fund meets all of the conditions set out in Schedule 3 of the principal instrument and should therefore also be listed in Schedule 2.
• The Diocesan Development Fund (Diocese of Armidale) was inadvertently omitted from Schedule 2 of the principal instrument. APRA considers that The Diocesan Development Fund (Diocese of Armidale) meets all of the conditions set out in Schedule 3 of the principal instrument and should therefore also be listed in Schedule 2.
• APRA has also become aware that Banking exemption order No. 73, which applies to The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane, was, by inadvertence, not revoked by the principal instrument.

2.                   Purpose of the instrument

The purpose of the amending instrument is to vary the principal instrument to include the additional funds which have advised APRA that they wish to obtain the benefit of the exemption and to rectify the omissions identified above.  

3. Consultation

APRA has consulted with the individual funds affected by the variation. More widespread consultation was considered unnecessary as the amending instrument is of a minor and machinery nature and does not substantially alter existing arrangements.