Banking (prudential standard) determination No. 4 of 2011
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 October 2011, APRA made Banking (prudential standard) determination No. 4 of 2011 under subsections 11AF(1) and (3) of the Act (the instrument).
The instrument revokes Prudential Standard APS 120 Securitisation (old APS 120) as determined on 30 November 2007 by Banking (prudential standard) determination No. 11 of 2007.
The instrument will take effect when it is registered on the Federal Register of Legislative Instruments.
- Background
The Banking Amendment (Covered Bonds) Act 2011 amends the Banking Act 1959 to permit ADIs to issue covered bonds. Accordingly, the prohibition in paragraph 7 of the old APS 120 against an ADI issuing covered bonds needs to be removed.
2. Purpose and operation of the instrument
The purpose of the instrument is to revoke old APS 120 and to make a new APS 120 which removes the prohibition on ADIs issuing covered bonds.
3. Consultation
APRA participated in consultation meetings convened by Treasury with ADIs, the Australian Bankers’ Association, the Australian Securitisation Forum and other parties on the Banking Amendment (Covered Bonds) Bill 2011 (the Bill). All parties acknowledged the need to remove the prohibition against covered bonds in old APS 120 once the Bill became law.
4. Regulation Impact Statement
The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required.