Financial Sector (Collection of Data) (reporting standard) determination No. 13 of 2014 - SRS 330.2 - Statement of Financial Performance

Administered by Department of the Treasury

Legislation au F2014L00675 Not in force Legislative Instrument

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Financial Sector (Collection of Data) (reporting standard) determinations No. 12 to 15 of 2014

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 issue an instrument 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.

On 2 June 2014, APRA made the following determinations (the instruments):

(1)          Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2014 which:

(i)            revokes Reporting Standard SRS 330.1 Statement of Financial Performance made under Financial Sector (Collection of Data) (reporting standard) determination No. 73 of 2013; and

(ii)         determines Reporting Standard SRS 330.1 Statement of Financial Performance (SRS 330.1);

(2)          Financial Sector (Collection of Data) (reporting standard) determination No. 13 of 2014 which:

(i)            revokes Reporting Standard SRS 330.2 Statement of Financial Performance made under Financial Sector (Collection of Data) (reporting standard) determination No. 74 of 2013; and

(ii)         determines Reporting Standard SRS 330.2 Statement of Financial Performance (SRS 330.2);

(3)          Financial Sector (Collection of Data) (reporting standard) determination No. 14 of 2014 which:

(i)            revokes Reporting Standard SRS 800.0 Financial Statements made under Financial Sector (Collection of Data) (reporting standard) determination No. 94 of 2013; and

(ii)         determines Reporting Standard SRS 800.0 Financial Statements (SRS 800.0); and

(4)          Financial Sector (Collection of Data) (reporting standard) determination No. 15 of 2014 which:

(i)            revokes Reporting Standard SRS 801.0 Investments and Investment Flows made under Financial Sector (Collection of Data) (reporting standard) determination No. 95 of 2013; and

(ii)         determines Reporting Standard SRS 801.0 Investments and Investment Flows (SRS 801.0).

SRS 330.2, SRS 800.0 and SRS 801.0 commence on 30 June 2014 and apply to reporting periods ending on or after that date. SRS 330.1 commences on 1 July 2014 and applies to reporting periods ending on or after that date.

  1.    Background

APRA is empowered to make reporting standards under the Act, which require regulated institutions, including RSE licensees, to submit specified data through various reporting forms. Data from these forms are used internally to assist APRA’s supervisory functions and by other agencies such as the Australian Bureau of Statistics and the Australian Securities and Investments Commission. APRA also collates and publishes statistical information and analysis using data from these reporting forms.

In 2013, APRA released a suite of 37 final reporting standards applying to the superannuation industry.

Since the commencement of the new reporting requirements, APRA has received industry feedback on some of these obligations, seeking clarification and guidance on interpretation. As a result, APRA has publicly released a number of frequently asked questions (FAQs) on the APRA website to provide timely guidance for RSE licensees to ensure the submission of high quality data to APRA.

A number of matters raised by industry stakeholders and which are covered in FAQs are those that APRA considers necessary to include in the reporting standards, forms and instructions on an ongoing basis.

On 25 March 2014, APRA released revised versions of six quarterly reporting standards which APRA had identified as requiring minor amendment, largely with respect to the reporting instructions. These minor amendments somewhat simplified the superannuation industry’s reporting obligations, but did not impose any new obligations.

Following this, APRA has identified four annual reporting standards which would benefit from minor amendment, largely with respect to the reporting instructions.  Where appropriate, these amendments bring about consistency with the six quarterly reporting standards mentioned above.

2.      Purpose and operation of the instruments

The purpose of making the instruments is to amend four annual reporting standards to ensure that all relevant information relating to compliance with the reporting requirements is available in one, consolidated location. APRA has incorporated the materials from the FAQs, as well as a small number of other minor corrections, into the reporting standards, forms and instructions. This requires revoking the four old annual reporting standards and replacing them with new versions that reflect the minor amendments.

The types of changes that APRA has made include: correction of paragraph references, provision of additional examples for reporting data, clarification of instructions for when updated information needs to be reported to APRA and minor changes to definitions to ensure that they reflect recognized industry terminology and practice. Details of the changes to the four annual reporting standards are outlined below:

(1)     Reporting Standard SRS 330.1 Statement of Financial Performance

  • Removal of references to select investment options, pending re-consultation;
  • Clarity about the treatment of lump sum benefit payments and insurance related inflows;
  • Confirmation that investment income and investment expenses should be reported on a gross basis; and
  • Clarification that operating income is to include rebates on fees charged to members and additional detail for reporting on insurance related inflows and fee rebates.

(2)   Reporting Standard SRS 330.2 Statement of Financial Performance

  • Clarity about the treatment of lump sum benefit payments and insurance related inflows;
  • Confirmation that investment income and investment expenses should be reported on a gross basis; and
  • Clarification that operating income is to include rebates on fees charged to members and additional detail for reporting on insurance related inflows and fee rebates.

(3)   Reporting Standard SRS 800.0 Financial Statements

  • Additional detail about how to report members’ benefits for members with defined benefit and defined contribution interests;
  • Confirmation that investment income and investment expenses should be reported on a gross basis;
  • Clarity about the treatment of lump sum benefit payments and insurance related inflows; and
  • Clarification that operating income is to include rebates on fees charged to members and additional detail for reporting on insurance related inflows and fee rebates.

(4)   Reporting Standard SRS 801.0 Investments and Investment Flows

  • The addition of a new investment vehicle type ‘life company other’, for consistency with amendments made in March 2014 to Reporting Standard SRS 530.1 Investments and Investment Flows (SRS 530.1) and Reporting Standard SRS 533.0 Asset Allocation (SRS 533.0);
  • Additional detail on look-through reporting requirements, and definition of equity investments and asset and investment vehicle domicile;
  • Clarification of requirements to report currency hedged investments and indirectly held assets exposed to derivatives contracts; and
  • Rewording of the definition of ‘life company guaranteed’ and ‘life company investment linked’ and inclusion of the definition of ‘life company other’, for consistency with amendments made in March 2014 to SRS 530.1 and SRS 533.0.

3.      Consultation

APRA undertook extensive consultations on the development of the 37 reporting standards, including SRS 330.1, SRS 330.2, SRS 800.0 and SRS 801.0, which were determined in 2013.

The substance of these changes, which do not substantially alter existing arrangements, has been previously communicated to industry via the FAQs on APRA’s website.

4.  Regulation Impact Statement

The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required for these legislative instruments.

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

Financial Sector (Collection of Data) (reporting standard) determinations Nos. 12 to 15 of 2014

 

The above legislative instruments are compatible with the human rights and freedoms recognised or declared in the international instrument listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (HRPS Act).

Overview of the legislative instruments

The purpose of making these legislative instruments is to revoke existing reporting standards and remake reporting standards to make minor and machinery amendments to the reporting requirements in relation to RSE licensees.

Human rights implications

APRA has assessed the instruments against the international instruments listed in section 3 of the HRPS Act and determined that only Article 17 of the International Covenant on Civil and Political Rights (ICCPR) is conceivably potentially of relevance to the legislative instruments.

Article 17 of the ICCPR prohibits the arbitrary or unlawful interference with a person’s privacy, family, home and correspondence, and attacks on reputation. Article 17 is exclusively concerned with prohibiting interference with the privacy and/or reputation of individual persons. It does not extend to the privacy and/or reputation of corporate entities.

The majority of information collected will be about the profile and structure, financial performance and investments of each RSE licensee’s business operations but will not involve the collection of information directly relating to individual persons.

Consequently the instrument 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

Financial Sector (Collection of Data) (reporting standard) determinations Nos. 12 to 15 of 2014 are compatible with human rights because the instruments do not limit human rights or otherwise raise any human rights issues.

 

Overview

The Financial Sector (Collection of Data) (reporting standard) determinations Nos. 12 to 15 of 2014, enacted by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, were introduced to address the need for clarity and consistency in the reporting requirements for financial sector entities, particularly RSE licensees. These determinations aimed to amend four annual reporting standards by incorporating minor amendments and clarifications from industry feedback and APRA's frequently asked questions. The changes included corrections to paragraph references, additional examples for reporting data, clarification of reporting instructions, and minor adjustments to definitions to align with industry terminology and practice. The purpose was to ensure that all relevant compliance information is available in a consolidated location, simplifying the industry's reporting obligations without imposing new requirements. The instruments also revoked the previous versions of the reporting standards to replace them with the updated versions reflecting these minor amendments.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determinations No. 12 to 15 of 2014, issued by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, apply to regulated institutions in the financial sector, specifically those within the superannuation industry, such as Responsible Superannuation Entity (RSE) licensees. These determinations aim to revise and update the reporting standards to ensure that all relevant information required for compliance is consolidated and easily accessible. The instruments revoke the previous reporting standards and introduce new ones, focusing on minor amendments and clarifications to reporting instructions, definitions, and examples. These changes are intended to improve the quality of data submitted to APRA and do not impose new obligations on the industry. The new reporting standards become effective from 30 June 2014 for three of the standards, and from 1 July 2014 for the remaining one, applying to reporting periods ending on or after these dates. APRA has assessed these legislative instruments as being compatible with human rights, as they do not engage any of the applicable rights or freedoms recognised or declared in the relevant international instruments.

Key Provisions

The key operative sections of the Financial Sector (Collection of Data) (reporting standard) determinations Nos. 12 to 15 of 2014 involve the amendment and revocation of existing reporting standards and the introduction of new ones. Specifically, these instruments (sections 1 and 2) revoke Reporting Standard SRS 330.1 Statement of Financial Performance, Reporting Standard SRS 330.2 Statement of Financial Performance, Reporting Standard SRS 800.0 Financial Statements, and Reporting Standard SRS 801.0 Investments and Investment Flows made under previous determinations, and then determine new versions of these reporting standards. The new standards, SRS 330.1, SRS 330.2, SRS 800.0, and SRS 801.0, incorporate minor amendments to the reporting instructions and other clarifications based on industry feedback and FAQs published by APRA. These changes aim to ensure consistency and clarity in the data reported by financial sector entities. The obligations imposed by these instruments on financial sector entities, particularly RSE licensees, are to comply with the newly determined reporting standards. This includes submitting specified financial and operational data through prescribed reporting forms. Entities must ensure that their reports accurately reflect their financial performance, investment details, and other relevant business activities as per the updated instructions and standards. Entities also need to update their internal systems and processes to align with the new reporting requirements, ensuring timely and accurate submission of data to APRA. The determinations do not explicitly outline specific offences, penalties, or consequences for breach in the provided text. However, non-compliance with APRA’s reporting requirements can lead to regulatory actions under the Financial Sector (Collection of Data) Act 2001. Penalties for non-compliance could include fines and other sanctions imposed by APRA. The exact penalties are not specified in the text but generally, severe or repeated non-compliance can result in significant financial penalties, enforcement actions, or even the imposition of additional reporting requirements or restrictions on business operations. It is important for entities to adhere strictly to the reporting standards to avoid these potential repercussions.

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