Overview

The Banking exemption No. 2 of 2006 was introduced to amend the principal instrument, Banking exemption No. 1 of 2006, under the Banking Act 1959. This legislation was enacted by the Australian Prudential Regulation Authority (APRA) to address specific omissions and inclusions identified since the principal instrument was made on 26 June 2006. The primary objective of this amending instrument is to rectify the oversights and ensure that all funds meeting the specified conditions are appropriately listed and exempt from certain banking regulations. APRA has consulted with the individual funds involved in this amendment, deeming broader consultation unnecessary due to the minor nature of the changes. The purpose is to provide clarity and completeness to the exemption order, ensuring that all relevant funds are correctly identified and benefit from the exemption as intended.

Scope and Application

The Banking exemption No. 2 of 2006, an instrument prepared by the Australian Prudential Regulation Authority under the Banking Act 1959, specifically targets certain religious charitable development funds by providing them with exemptions from the application of the Act. The scope of the amending instrument encompasses additional funds identified by the UCA Funds and other entities, including the Development Fund, The Uniting Church in Australia Property Trust (Victoria), the Funeral Fund, the UCA – Investment Fund (Presbytery of Canberra Region), the Uniting Church in Australia Synod of Western Australia Uniting Church Investment Fund, and The Diocesan Development Fund (Diocese of Armidale). These funds have been identified as meeting the conditions set out in Schedule 3 of the principal instrument and are thus eligible for exemption from specified provisions of the Banking Act 1959. The amending instrument aims to correct omissions and update the list of exempted funds, ensuring that those who wish to benefit from the exemption are properly included. The instrument operates within the Commonwealth jurisdiction and its reach is limited to the specified entities and their operations as outlined in the schedules of the amending and principal instruments.

Key Provisions

Banking exemption No. 2 of 2006 (the amending instrument) amends Banking exemption No. 1 of 2006 by adding certain funds to the list of religious charitable development funds that are exempt from certain provisions of the Banking Act 1959 (subsection 11(1)). This includes adding the Development Fund, The Uniting Church in Australia Property Trust (Victoria), the Funeral Fund, UCA – Investment Fund (Presbytery of Canberra Region), Uniting Church in Australia Synod of Western Australia Uniting Church Investment Fund, and The Diocesan Development Fund (Diocese of Armidale) to Schedule 2 of the principal instrument (section 2). It also ensures that Banking exemption order No. 73, which applies to The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane, remains in effect (section 3). The amending instrument imposes obligations on the Australian Prudential Regulation Authority (APRA) to ensure that the specified funds are listed in Schedule 2 of the principal instrument, provided they meet the conditions set out in Schedule 3 of the principal instrument (section 2). Additionally, APRA is required to consult with the individual funds affected by the variation (section 3). The amending instrument does not substantially alter existing arrangements and is considered to be of a minor and machinery nature. The amending instrument does not specify any offences, penalties, or consequences for non-compliance. However, it is important to note that any failure to comply with the provisions of the Banking Act 1959 could result in civil or criminal liability, including fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties for breaches of the Banking Act 1959 are set out in section 14 of the Act, which provides for fines of up to $210,000 for individuals and $1,050,000 for bodies corporate, as well as imprisonment for up to five years for serious offences.