Banking exemption No. 2 of 2011

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Banking Act 1959, subsection 11(4)

Under subsection 11(1) of the Banking Act 1959 (the Act), APRA may, in writing, determine that any or all of the provisions of the Act referred to in paragraphs 11(1)(a) to (e) do not apply to a person while the determination is in force. Under subsection 11(4) of the Act, APRA may, in writing, vary or revoke a determination made under section 11.

Banking exemption No. 2 of 2011 (the amending instrument) varies Banking exemption No. 1 of 2011 (the principal instrument), which was made on 17 June 2011.

The amending instrument will come into force on the day that it is registered on the Federal Register of Legislative Instruments (FRLI).

1.                Background

The principal instrument revoked a number of exemptions which had been made under section 11 of the Act in respect of various charitable development funds operating in Australia and replaced them with a single exemption applying to all the charitable development funds listed in Schedule 1 of the principal instrument. The effect of the principal instrument was that the charitable development funds listed in Schedule 1 would not have to be authorised by APRA as authorised deposit-taking institutions under section 9 of the Act so long as they complied with the conditions specified in Schedule 2 of the principal instrument.

APRA received notification from three Religious Charitable Development Funds listed in Schedule 1 of the principal instrument that each has changed its name as follows:

1. from ‘Adelaide Synod Trust Fund’ to ‘Anglican Funds - South Australia’; and
2. from ‘Baptist Investment & Finance Limited’ to ‘Baptist Financial Services Australia Limited’; and
3. from ‘Uniting Growth Fund Limited’ to ‘UCA Funds Management Limited’.

Also, APRA has received an application from The Properties Corporation of the Churches of Christ for this body to be included in Schedule 1 of the principal instrument so as to obtain the benefit of the section 11 exemption. APRA considers that this body meets all of the conditions set out in Schedule 2 of the principal instrument, is a body which the principal instrument is designed to capture and should therefore be listed in Schedule 1 of the principal instrument.

2.                   Purpose of the amending instrument

The purpose of the amending instrument is to vary the principal instrument to record the change of names for the three funds, and to include the additional fund, listed above.

3. Consultation

APRA consulted with the individual funds affected by the variation and the Office of Best Practice Regulation (OBPR). The OBPR confirmed that no further regulatory analysis in the form of a regulatory impact statement is required due to the minor and machinery nature of this extension.