Banking (prudential standard) determination No. 3 of 2015
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Banking Act 1959, section 11AF
Under subsection 11AF(1) of the Banking Act 1959 (the Act), APRA has the power to determine standards (prudential standards), in writing, in relation to prudential matters to be complied with by authorised deposit-taking institutions (ADIs) and authorised non-operating holding companies (authorised NOHCs). Under subsection 11AF(3) of the Act, APRA may, in writing, vary or revoke a prudential standard.
On 20 July 2015, APRA made the following determination (the instrument):
- Banking (prudential standard) determination No. 3 of 2015, which revokes Banking (prudential standard) determination No. 2 of 2015, including Prudential Standard APS 330 Public Disclosure (APS 330) made under that determination, and determines a new Prudential Standard APS 330 Public Disclosure (new APS 330).
The instrument commences on 1 August 2015.
1. Background
In May 2015, APRA determined APS 330 under Banking (prudential standard) determination No. 2 of 2015. APS 330 incorporated new disclosure requirements in relation to the leverage ratio, liquidity coverage ratio and the identification of potential global systemically important banks. APS 330 took effect on 1 July 2015.
APRA has become aware that some text was inadvertently omitted from paragraph 21(b) of APS 330. This text relates to the definition of ‘material risk-taker’ for the purposes of the remuneration disclosure requirements in Attachment G to APS 330.
APRA is revoking APS 330 and determining new APS 330 to correct this omission.
2. Purpose and operation of the instrument
The purpose of the instrument is to revoke APS 330 and replace it with the new APS 330.
The new APS 330 is the same in substance as APS 330 but corrects an omission in paragraph 21(b), which relates to the definition of ‘material risk-taker’ for the purposes of the remuneration disclosure requirements in Attachment G to APS 330.
3. Consultation
The change with respect to the definition of ‘material risk-taker’ has not been subject to public consultation as it is consistent with, and gives effect to, APRA’s previously consulted upon position.
4. Regulation Impact Statement
The Office of Best Practice Regulation has confirmed that a Regulation Impact Statement is not required.
5. Statement of compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
A Statement of Compatibility prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is provided at Attachment A to this Explanatory Statement.
ATTACHMENT A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Banking (prudential standard) determination No. 3 of 2015
The 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 (HRPS Act).
Overview of the Legislative Instrument
The purpose of the instrument is to revoke Prudential Standard APS 330 Public Disclosure (APS 330) determined by APRA in May 2015 and replace it with a new Prudential Standard APS 330 Public Disclosure (new APS 330). New APS 330 rectifies an omission in APS 330 with respect to the definition of ‘material risk-taker’ for the purposes of APRA’s remuneration disclosure requirements.
Human rights implications
APRA has assessed the instrument and is of the view that it does not engage any of the applicable rights or freedoms recognised or declared in the international instruments listed in section 3 of the HRPS Act. Accordingly, in APRA’s assessment, the instrument is compatible with human rights.
Conclusion
The instrument is compatible with human rights as it does not raise any human rights issues.