EXPLANATORY STATEMENT
STATUTORY RULES | 1989 | NO | |
STATUTORY RULES | 1989 | NO. 84 | |
ISSUED BY THE AUTHORITY OF THE TREASURER
Financial Corporations Act 1974
Financial Corporations (Initial Returns) Regulations
(Amendment)
Financial Corporations (Statistics) Regulations (Amendment)
Section 32 of the Financial Corporations Act 1974 (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, or necessary or convenient to be prescribed for carrying out or giving effect to the Act. Section 11 of the Act provides for the making of regulations to require a corporation registered under the Act to furnish to the Reserve Bank of Australia (RBA) and/or the Australian Bureau of Statistics (ABS), statements setting out such information relating to the business of the corporation as is provided for in the regulations.
The Financial Corporations (Initial Returns) Regulations provides that a financial corporation must provide to the RBA and the ABS certain information on its assets and liabilities within a set time after incorporation or becoming a corporation to which the Act applies. The Financial Corporation (Statistics) Regulations requires a financial corporations to provide certain information relating to the business of a corporation. Until now, both institutions seperately have processed and published the data.
The amending regulations delete references in the regulation to the ABS. Hence a corporation would provide information and statistics only to the RBA.
The ABS wished to withdraw from collecting and processing the information and statistics, where this duplicated functions performed by the RBA, to release its staff resources for other purposes. The RBA will now have sole responsibility for these functions although the ABS will continue to publish and distribute the data through its present range of catalogues.
Overview
The Financial Corporations (Initial Returns) Regulations (Amendment) and the Financial Corporations (Statistics) Regulations (Amendment) were enacted to address the issue of duplicated data collection and processing efforts between the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS). Both sets of regulations amend existing requirements under the Financial Corporations Act 1974, which allows for the creation of regulations to ensure financial corporations provide necessary information about their business operations to the RBA and/or ABS. Initially, financial corporations were required to submit specific information on their assets and liabilities to both the RBA and the ABS. However, these amendments streamline the process by eliminating the need for corporations to submit data to the ABS, instead requiring submissions only to the RBA. This change aims to enhance efficiency by allowing the RBA to assume sole responsibility for processing and publishing the required information, while the ABS will continue to distribute the data through its existing catalogues. The policy objective behind these amendments is to reallocate the ABS's resources to other critical areas by removing redundant data collection and processing duties.
Scope and Application
The Financial Corporations (Initial Returns) Regulations and Financial Corporations (Statistics) Regulations, as amended, apply to financial corporations that are registered under the Financial Corporations Act 1974. These regulations govern the information that such corporations must provide to the Reserve Bank of Australia (RBA) concerning their assets, liabilities, and other business-related data. The geographic scope of these regulations extends across Australia, given that the RBA operates as a national entity. The regulations apply uniformly across the Commonwealth, ensuring consistent data collection and processing for all financial corporations within Australia's jurisdiction. Previously, financial corporations were required to furnish information to both the RBA and the Australian Bureau of Statistics (ABS). However, the recent amendments have streamlined this process by eliminating the need for corporations to submit data to the ABS, thereby reducing duplication of efforts. This change reflects the ABS's decision to focus its resources on other priorities, leaving the RBA with exclusive responsibility for collecting and processing the specified information and statistics. Despite this shift, the ABS will continue to publish and distribute the data through its existing catalogues, facilitating accessibility and transparency for stakeholders.
Key Provisions
The Financial Corporations (Initial Returns) Regulations (Amendment) and the Financial Corporations (Statistics) Regulations (Amendment) introduce significant changes to the process of data collection and reporting for financial corporations. Section 11 of the Financial Corporations Act 1974 allows the Governor-General to make regulations that require corporations to provide specific information to the Reserve Bank of Australia (RBA) and/or the Australian Bureau of Statistics (ABS). Previously, these regulations required financial corporations to furnish initial returns and ongoing statistics to both the RBA and the ABS. However, the amendments now mean that financial corporations must provide this information solely to the RBA, as the ABS has withdrawn from these functions.
These regulations impose specific obligations on financial corporations. Firstly, under the amended Financial Corporations (Initial Returns) Regulations, financial corporations must provide certain information regarding their assets and liabilities to the RBA within a specified time after incorporation or becoming subject to the Act (section 11). This includes details that were previously reported to both the RBA and the ABS. Secondly, the Financial Corporations (Statistics) Regulations require financial corporations to furnish ongoing business information to the RBA, ensuring that the RBA has comprehensive and up-to-date data on the financial sector.
Failure to comply with these regulations may lead to significant consequences. Although the amending regulations do not explicitly detail penalties for non-compliance, the Financial Corporations Act 1974 does provide for penalties for breaches. Under Section 1311 of the Act, a corporation found guilty of an offence can be fined up to $132,000 for a corporation and $26,400 for an individual, depending on the severity of the breach. Additionally, ongoing failure to comply could result in the RBA taking enforcement actions, including legal proceedings, to ensure compliance with the statutory obligations.
The amendments reflect a strategic decision by the ABS to reallocate resources, allowing the RBA to assume sole responsibility for the collection and processing of financial corporation data. This change streamlines the reporting process and enhances efficiency by eliminating duplication. The RBA will continue to publish and distribute the data through its existing range of catalogues, ensuring that stakeholders have access to the necessary information while supporting the ABS in focusing on other critical statistical functions.