Banking (Statistics) Regulations (Amendment) 1998 No. 198
EXPLANATORY MEMORANDUM
Statutory Rules 1998 No. 198
Minute No. 198 of 1998 - Treasurer
Subject - Banking Act 1959
Banking (Statistics) Regulations (Amendment)
Section 71 of the Banking Act 1959 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by regulations for carrying out or giving effect to the Act.
Section 51 of the Act allows regulations to be made with respect to the collection and publication of information about banks. The Banking (Statistics) Regulations give effect to this section.
The purpose of the proposed regulations is to amend the Banking (Statistics) Regulations to be consistent with the amendments being made to the Act as part of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998.
The amendments to the Act will have the effect of extending its coverage from banks to a wider range of financial institutions to be known as authorised deposit-taking institutions (ADIs). Accordingly, some of the proposed amendments will involve substituting the word 'bank' wherever it occurs with 'ADI'.
The amendments to the Act also involve transferring the responsibility for the prudential regulation of institutions regulated under the Act from the Reserve Bank of Australia to the Australian Prudential Regulation Authority (APRA). As part of this, APRA will be responsible for collecting data from ADIs under the Banking (Statistics) Regulations. Therefore, the remainder of the amendments will involve substituting the phrase 'the Reserve Bank' with 'APRA' as appropriate.
The proposed regulations will commence on 1 July 1998.
Authority: Section 71 of the Banking Act 1959
Overview
The Banking (Statistics) Regulations (Amendment) 1998 No. 198, enacted by the Treasurer under the authority of Section 71 of the Banking Act 1959, addresses the need to update the regulatory framework governing the collection and publication of financial institution data in light of broader financial sector reforms. This amendment was introduced to ensure consistency with the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, which expanded the scope of the Banking Act 1959 to encompass a wider range of financial entities, referred to as authorised deposit-taking institutions (ADIs), and transferred the prudential regulation responsibilities from the Reserve Bank of Australia to the Australian Prudential Regulation Authority (APRA). The policy objective is to modernise the regulatory oversight and statistical reporting mechanisms to reflect these changes, ensuring that APRA can effectively collect and publish data from ADIs as mandated by the amended Banking Act. These regulations commenced on 1 July 1998, aligning the collection and publication processes with the new regulatory landscape.
Scope and Application
The Banking (Statistics) Regulations (Amendment) 1998 No. 198 applies to authorised deposit-taking institutions (ADIs) within Australia, extending the scope from traditional banks to a broader category of financial institutions. The amendment to the Banking Act 1959, which these regulations support, mandates the collection and publication of statistical information from these ADIs, a responsibility now held by the Australian Prudential Regulation Authority (APRA) rather than the Reserve Bank of Australia. These regulations provide the necessary framework for the data collection process, ensuring consistency and compliance with the new legislative environment. The changes also reflect a shift in regulatory authority and reflect broader financial sector reforms aimed at enhancing the oversight and stability of Australia's financial institutions. These regulations will take effect on 1 July 1998, aligning with the amendments introduced by the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998.
Key Provisions
The Banking (Statistics) Regulations (Amendment) 1998 No. 198 makes amendments to the Banking (Statistics) Regulations to align them with the changes introduced by the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998. Section 51 of the Banking Act 1959 mandates the creation of regulations concerning the collection and publication of information about banks. The Banking (Statistics) Regulations implement this requirement by detailing the procedures for data collection and reporting. The amendments introduced by the 1998 Regulations extend the scope of these regulations from merely banks to include a broader category of financial institutions, now referred to as authorised deposit-taking institutions (ADIs). As such, the term 'bank' is replaced with 'ADI' throughout the regulations to reflect this broader scope (Section 71).
The obligations imposed by these regulations on ADIs include the collection and submission of specified statistical data to the Australian Prudential Regulation Authority (APRA). The regulations mandate ADIs to report on various financial metrics and activities, ensuring that APRA has access to comprehensive and up-to-date information. This data is essential for APRA to perform its regulatory functions, including the prudential supervision of ADIs. The regulations outline the specific types of data to be collected, the frequency of reporting, and the format in which the information must be submitted, thereby ensuring consistency and comparability across the sector.
Failure to comply with the requirements set out in these regulations can result in significant consequences. Under Section 71 of the Banking Act 1959, penalties for non-compliance may include fines and other legal sanctions. The exact penalties are not specified within the explanatory memorandum but generally, the Act provides for substantial fines for breaches of its provisions. Additionally, persistent non-compliance could lead to more severe regulatory actions, including potential revocation of the institution's authorisation to operate as an ADI. These measures underscore the importance of adhering to the regulatory requirements to avoid adverse legal and financial repercussions.