Overview

The Banking exemption No. 4 of 2011, issued by the Australian Prudential Regulation Authority (APRA) under the Banking Act 1959, was introduced to address the need for a specific exemption to be granted to The Churches of Christ Property Trust from the prohibition on carrying on banking business in Australia without authorisation. This exemption builds upon the previous Determination No. 1 of 2011, which exempted certain charitable development funds from the prohibition, provided they met specific conditions. The policy objective of this amendment is to ensure that entities which align with the purpose and conditions of Determination No. 1 are properly exempted from the banking prohibition, facilitating their operations within the regulatory framework while maintaining financial oversight and stability. Determination No. 4 came into force on the day it was registered on the Federal Register of Legislative Instruments.

Scope and Application

Banking exemption No. 4 of 2011 applies to The Churches of Christ Property Trust, providing an exemption from specific provisions of the Banking Act 1959. This exemption allows the Trust to engage in activities that would otherwise be restricted to authorised entities under sections 7 and 8 of the Act. The exemption is contingent on the Trust meeting the conditions outlined in Schedule 2 of Determination No. 1, ensuring that their operations align with regulatory standards. Geographically, this exemption operates under the purview of the Commonwealth, as the Banking Act 1959 is a federal law. The exemption does not extend to any other entities beyond those specified in the schedules of the determinations. Determination No. 4 modifies the previous exemption by including The Churches of Christ Property Trust, reflecting the Trust's compliance with the stipulated conditions. The amendment comes into effect upon registration on the Federal Register of Legislative Instruments, ensuring a clear and timely application of the changes.

Key Provisions

Determination No. 4 of 2011, under the Banking Act 1959, introduces an exemption from certain banking prohibitions for The Churches of Christ Property Trust. Specifically, section 11(1) of the Act allows the Australian Prudential Regulation Authority (APRA) to exempt specified provisions of the Act from applying to certain persons if they meet specified conditions. Determination No. 4 amends the previous Determination No. 1, which was made on 17 June 2011, by adding The Churches of Christ Property Trust to the list of charitable development funds exempted from the prohibition on carrying on banking business unless authorised by APRA. This exemption is contingent upon the trust meeting all conditions outlined in Schedule 2 of Determination No. 1. The obligations imposed by the Act on entities such as The Churches of Christ Property Trust include compliance with the conditions set out in Schedule 2 of Determination No. 1. These conditions are designed to ensure that the exempted entities do not engage in activities that could pose a risk to the financial stability of the banking system. For instance, the conditions may include requirements related to the management of funds, the maintenance of adequate records, and the reporting of financial activities to APRA. Compliance with these conditions is crucial for maintaining the exemption status. Failure to comply with the conditions outlined in the determination can result in serious consequences. Under the Act, any breach of the conditions can lead to the revocation of the exemption. In such cases, the entity would then be subject to the full provisions of the Act, which prohibit carrying on banking business without APRA authorisation. Additionally, the Act may provide for both civil and criminal penalties for breaches, although specific penalties are not detailed in this determination. The severity of these penalties would depend on the nature and extent of the breach, with potential maximum penalties available under the relevant sections of the Act.