Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023

Administered by Department of the Treasury

Legislation au F2023L00313 In force Legislative Instrument

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Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023

EXPLANATORY STATEMENT

Prepared by the Australian Prudential Regulation Authority (APRA)

Financial Sector (Collection of Data) Act 2001, sections 13 and 15

Acts Interpretation Act 1901, section 33

Under subsection 13(1) of the Financial Sector (Collection of Data) Act 2001 (the Act), APRA has the power to determine reporting standards, in writing, with which financial sector entities must comply. Such standards relate to reporting financial or accounting data and other information regarding the business or activities of the entities. Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue an instrument of a legislative or administrative character the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to revoke any such instrument.

Subsection 15(1) of the Act provides that APRA may declare a day on and after which the reporting standards are to apply.

On 21 March 2023, APRA determined the Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023 which:

(1)   revokes Reporting Standard ARS 111.0 Fair Values (ARS 111.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 6 of 2012; and

 

(2)   determines a new version of ARS 111.0.

The instrument commences on 1 April 2023.

  1. Background

APRA’s prudential framework includes a suite of prudential standards that impose capital requirements for authorised deposit-taking institutions (ADIs), for the purpose of ensuring ADIs hold sufficient capital to address the risks associated with their operations.

Two of these standards are Prudential Standard APS 110 Capital Adequacy (APS 110) and Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111). APS 110 sets out the requirements that must be met by an ADI to maintain adequate capital, on both a Level 1 and Level 2 basis, to act as a buffer against the risk associated with its activities. APS 111 sets out the characteristics that an instrument must have to qualify as Regulatory Capital for an ADI and the various regulatory adjustments to be made to determine total Regulatory Capital on both a Level 1 and Level 2 basis.

ARS 111.0 sets out an ADI’s reporting requirements to APRA in relation to an ADI’s fair value measurement. It includes Form ARF 111.0 Fair Values (and the associated instructions) and should be read in conjunction with APS 110 and APS 111. ARS 111.0 permits APRA to collect data to support APRA’s prudential supervision of ADIs under APS 110 and APS 111. The data collected under ARS 111.0 is also used by the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS) to assist them with their functions.

ARS 111.0 was last determined by APRA in 2012 (the previous ARS 111.0).

2.      Purpose and operation of the instrument

The previous ARS 111.0 was to be repealed by sunsetting on 1 April 2023 under subsection 50(1) of the Legislation Act 2003. APRA has reviewed the regulatory performance of the previous ARS 111.0 and found that it continues to be fit for purpose. Consequently, APRA intends that it be remade without substantive changes.

The purpose of the instrument is to revoke the previous ARS 111.0 and remake ARS 111.0 with minor changes to use the drafting style employed currently for APRA’s reporting standards, such as formatting to improve readability and accessibility, make minor definitional changes and update the commencement date. The changes to ARS 111.0 do not alter the existing reporting obligations or interests of ADIs. The due dates, data required and the application of the reporting standard have not changed.

The instrument incorporates by reference certain provisions of Acts, Prudential Standards, and Australian Accounting Standards issued by the Australian Accounting Standards Board. All of these references are references to the instruments as they exist from time to time. These instruments are disallowable instruments and are available on the Federal Register of Legislation at www.legislation.gov.au.

There are a number of powers that may be exercised by APRA in reporting standards that involve an element of discretion and which may impact the interests of the financial sector entity to which the reporting standard applies. These decisions include APRA refusing to change a reporting period or due date for an ADI to provide information required by ARS 111.0. Decisions made by APRA exercising those powers are not subject to merits review. Delays caused by an entity seeking merits review of APRA’s decisions under one or more reporting standards could significantly compromise use of the data at an entity and aggregate level by APRA, the RBA and ABS. It is necessary that ARS 111.0 be allowed to continue in force from 1 April 2023 onwards.

APRA considers decisions made by APRA exercising discretions under its reporting standards should not be subject to merits review as they are financial decisions with a significant public interest element.

Consultation

The substance of ARS 111.0 has already been consulted on with industry when originally determining the reporting standard (see the Explanatory Statement for the previous ARS 111.0). APRA is satisfied that further consultation is not necessary and not reasonably practicable to undertake for this instrument. The instrument does not alter the existing reporting obligations that are required to be complied with by ADIs and any changes to the instrument are minor and machinery in nature.

3.      Regulation Impact Statement

The Office of Impact Analysis has advised that a Regulation Impact Statement is not required for this legislative instrument.

4.      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

Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023

This Legislative 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

Reporting Standard ARS 111.0 Fair Values (ARS 111.0) outlines the overall requirements for the provision of information to APRA relating to fair value measurement of an authorised deposit taking institution (ADI). ADIs are bodies corporate authorised to carry on banking business in Australia.

The purpose of the Legislative Instrument is to revoke the existing ARS 111.0 determined by APRA in 2012 and replace it with a new version. A new version of ARS 111.0 is being made as the existing ARS 111.0 is due to sunset on 1 April 2023.

Human rights implications

APRA has assessed the Legislative 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 Legislative Instrument is compatible with human rights.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Overview

The Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023 was enacted on 21 March 2023 by the Australian Prudential Regulation Authority (APRA), under the authority conferred by the Financial Sector (Collection of Data) Act 2001. This legislative instrument was introduced to address the impending sunset of the previous reporting standard, ARS 111.0 Fair Values, which was set to expire on 1 April 2023. The primary objective of this determination is to revoke the existing ARS 111.0 and replace it with a new version, maintaining the same reporting obligations for authorised deposit-taking institutions (ADIs) while improving the readability and accessibility of the reporting requirements. The new ARS 111.0 incorporates minor changes such as updated formatting and minor definitional adjustments but does not alter the substantive reporting obligations or interests of ADIs. This determination ensures the continuity of the necessary data collection process for APRA’s prudential supervision, as well as for the Reserve Bank of Australia and the Australian Bureau of Statistics.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023, made by the Australian Prudential Regulation Authority (APRA), primarily applies to authorised deposit-taking institutions (ADIs) in Australia. These ADIs, which are bodies corporate authorised to conduct banking business, must comply with the reporting standards set forth in this determination. The instrument revokes the previous Reporting Standard ARS 111.0 Fair Values and introduces a new version to ensure that these standards remain effective from 1 April 2023. The primary purpose of this determination is to maintain continuity in the reporting requirements for ADIs regarding their fair value measurements, facilitating APRA's prudential supervision, as well as assisting the Reserve Bank of Australia and the Australian Bureau of Statistics with their respective functions. The new ARS 111.0 incorporates minor changes in drafting style, formatting, and definitions without altering the substantive obligations or interests of the ADIs. The instrument is subject to the broader regulatory framework provided by the Financial Sector (Collection of Data) Act 2001 and the Acts Interpretation Act 1901, with decisions made by APRA under these standards not being subject to merits review.

Key Provisions

The Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2023, made under the Financial Sector (Collection of Data) Act 2001, primarily serves to revoke the existing Reporting Standard ARS 111.0 Fair Values (ARS 111.0) and to establish a new version of this reporting standard. This determination is effective from 1 April 2023 (sections 1 and 2). The Act, as referenced in section 13, empowers the Australian Prudential Regulation Authority (APRA) to set reporting standards for financial sector entities, ensuring they provide financial and accounting data about their operations. Section 15 of the Act allows APRA to specify a commencement date for these reporting standards. In this instance, the new ARS 111.0 is set to commence on 1 April 2023, replacing the outdated version from 2012. The obligations imposed by the Act on financial sector entities, particularly authorised deposit-taking institutions (ADIs), include providing detailed financial data to APRA. This data is essential for APRA to conduct its prudential supervision, ensuring ADIs maintain sufficient capital to manage risks. The new ARS 111.0 mandates ADIs to report on the fair value measurement of their assets and liabilities. This information is crucial not only for APRA but also for the Reserve Bank of Australia and the Australian Bureau of Statistics, who use this data to support their respective functions. Failure to comply with the requirements set out in ARS 111.0 may lead to several consequences. While the specific penalties are not detailed in the determination, breaches of reporting standards under the Financial Sector (Collection of Data) Act 2001 can result in civil and criminal penalties. Civil penalties can include fines, and in more severe cases, criminal penalties may apply, potentially leading to imprisonment. The exact penalties depend on the nature and severity of the breach, and the determination underscores the importance of timely and accurate reporting to avoid these repercussions. APRA retains significant discretion in enforcing these standards, including the ability to refuse changes to reporting periods or due dates. Such decisions are not subject to merits review, which is intended to prevent delays that could compromise the integrity of data used by regulatory bodies. This approach ensures that APRA can effectively manage and supervise the financial sector, maintaining stability and confidence in the financial system.

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Financial Law
Instrument
Regulation
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Definitions & Interpretation
Reporting & Disclosure Obligations
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.