Financial Sector (Collection of Data) (reporting standard) determination
No 14 of 2010
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Financial Sector (Collection of Data) Act 2001, paragraph 13(1)(a) and section 15
Acts Interpretation Act 1901, subsection 33(3)
Under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act), APRA may, by writing, determine reporting standards 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. Section 15 of the Act gives APRA power to make a formal declaration of the date when reporting standards begin to apply. 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.
Financial Sector (Collection of Data) (reporting standard) determination No. 14 of 2010 revokes the following reporting standards applying to certain registered entities and their obligation to report on their international exposures:
- Reporting Standard RRS 231.1a International Exposures: Locational (Assets) Part 1;
- Reporting Standard RRS 231.1b International Exposures: Locational (Liabilities) Part 1;
- Reporting Standard RRS 231.2 International Exposures: Locational Part 2:
- Reporting Standard RRS 231.3a International Exposures: Consolidated (Domestic Entity): and
- Reporting Standard RRS 231.3b International Exposures: Consolidated (Foreign Entity)
(collectively known as the International Exposure Reporting Standards).
The International Exposure Reporting Standards came into effect on 1 July 2006 pursuant to determinations 44 - 48 of 2006.
Determination No. 14 of 2010 commences on the day after registration on the Federal Register of Legislative Instruments.
- Background
This Explanatory Statement explains the changes being made by APRA to the reporting framework for registered entities.
Under the International Exposure Reporting Standards, only a registered entity that at the end of its most recent complete financial year had:
- total assets of $500 million or more; and
- overseas assets of $250 million or more; or
- borrowings from non-residents of $250 million or more
were previously required to report information to APRA on their international exposures in accordance with the International Exposure Reporting Standards.
This data was collected to fulfil APRA’s obligation to the Bank of International Exposure (BIS) in providing aggregate international banking statistics for Australia.
APRA has reviewed the aggregate data and agreed with the BIS that international exposures data for registered entities are no longer required.
Determination No. 14 of 2010 removes the reporting obligation on registered entities and reduces their reporting burden.
2. Consultation
On 6 October 2010, APRA advised by email to each affected registered entity, of APRA’s intention to revoke the International Exposure Reporting Standards and remove the reporting burden on them. Contact details were provided in the email in the event an entity had any comments or questions.
As to date, no comments/responses were received.
A letter was also published on APRA’s website on 6 October 2010.
Overview
The Financial Sector (Collection of Data) (Reporting Standard) Determination No 14 of 2010 was enacted to amend the reporting obligations for financial sector entities in Australia. This determination, prepared by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, revokes the previously established International Exposure Reporting Standards. These standards, which came into effect on 1 July 2006, required certain registered entities with significant international assets, liabilities, or borrowings to report on their international exposures to APRA. The policy objective behind this change was to align the data collection practices with the evolving needs of regulatory oversight and to reduce the reporting burden on financial entities, following a review of the aggregate data and consultation with the Bank for International Settlements (BIS).
Scope and Application
The Financial Sector (Collection of Data) (Reporting Standard) Determination No. 14 of 2010, issued by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, aims to modify the reporting framework for registered entities. The Act applies to financial sector entities that must comply with reporting standards concerning financial or accounting data and information about their business activities. Specifically, this determination addresses the International Exposure Reporting Standards, which were previously required for registered entities with total assets of $500 million or more, overseas assets of $250 million or more, or borrowings from non-residents of $250 million or more. These entities were mandated to report on their international exposures to APRA to meet obligations with the Bank for International Settlements (BIS). However, following a review of the aggregate data, APRA and BIS agreed that such data is no longer necessary, leading to the revocation of the International Exposure Reporting Standards by Determination No. 14 of 2010. This determination relieves specified registered entities from their reporting obligations, thereby reducing their reporting burden. The determination commences on the day after its registration on the Federal Register of Legislative Instruments.
Key Provisions
The main operative sections of the Financial Sector (Collection of Data) (reporting standard) determination No 14 of 2010 (the Determination) concern the revocation of the International Exposure Reporting Standards previously established under determinations 44 to 48 of 2006. These standards, which came into effect on 1 July 2006, required certain registered entities to report on their international exposures to the Australian Prudential Regulation Authority (APRA) if they met specific financial thresholds. Specifically, entities with total assets of $500 million or more, overseas assets of $250 million or more, or borrowings from non-residents of $250 million or more were mandated to report under these standards (section 1). The Determination revokes these standards and removes the reporting obligations on affected entities, effective from the day after its registration on the Federal Register of Legislative Instruments (section 2).
The Determination imposes obligations on registered entities by relieving them of the requirement to report on their international exposures. Previously, entities meeting the specified financial criteria had to submit detailed reports to APRA, as mandated by the now-repealed International Exposure Reporting Standards. These reports were crucial for APRA to fulfill its obligations to the Bank for International Settlements (BIS) in providing aggregate international banking statistics for Australia. With the revocation of the standards, these entities are no longer required to provide such data (section 3). This change aims to reduce the reporting burden on financial sector entities while maintaining the necessary aggregate data through other means.
In terms of potential consequences for breach, the Determination itself does not explicitly outline offences or penalties for non-compliance with the revoked reporting standards. However, any non-compliance with APRA’s reporting requirements generally could result in enforcement actions under the Financial Sector (Collection of Data) Act 2001. Such actions may include fines or other penalties, as stipulated in the Act. The maximum penalties for non-compliance with data collection requirements under the Act can be substantial, reflecting the importance of accurate and timely reporting in the financial sector. It is essential for entities to adhere to APRA’s directives to avoid potential enforcement actions and associated penalties.