Financial Sector (Collection of Data) determination No. 35 of 2016
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
Financial Sector (Collection of Data) Act 2001 (the Act), paragraph 13(1)(a)
Acts Interpretation Act 1901, subsection 33(3)
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 26 October 2016, APRA made Financial Sector (Collection of Data) (reporting standard) determination No. 35 of 2016 (the instrument) which revokes the following instruments:
(1) Financial Sector (Collection of Data) (reporting standard) determination No. 32 of 2007, including Reporting Standard DRS 1.0 – Notification made under that Determination;
(2) Financial Sector (Collection of Data) (reporting standard) determination No. 33 of 2007, including Reporting Standard DRS 100.0 – Insurance and Sundry Information made under that Determination;
(3) Financial Sector (Collection of Data) (reporting standard) determination No. 34 of 2007, including Reporting Standard DRS 210.0 – Outstanding Claims Liabilities made under that Determination;
(4) Financial Sector (Collection of Data) (reporting standard) determination No. 35 of 2007, including Reporting Standard DRS 300.0 – Statement of Financial Position made under that Determination;
(5) Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2007, including Reporting Standard DRS 310.0 – Statement of Financial Performance made under that Determination;
(6) Financial Sector (Collection of Data) (reporting standard) determination No. 37 of 2007, including Reporting Standard DRS 310.1 – Gross Earned Contribution Revenue & Insurance Expense made under that Determination;
(7) Financial Sector (Collection of Data) (reporting standard) determination No. 38 of 2007, including Reporting Standard DRS 310.2 – Claims Expense and Insurance Recoveries made under that Determination;
(8) Financial Sector (Collection of Data) (reporting standard) determination No. 39 of 2007, including Reporting Standard DRS 310.3 – Insurance by Class made under that Determination;
(9) Financial Sector (Collection of Data) (reporting standard) determination No. 40 of 2007, including Reporting Standard DRS 310.4 – Other Information made under that Determination; and
(10) Financial Sector (Collection of Data) (reporting standard) determination No. 11 of 2011, including Reporting Standard DRS 1.1 – Notification by AFS Licence holders made under that Determination.
The instrument commences on the date it is registered on the Federal Register of Legislation.
- Background
The reporting standards for the collection of data from Discretionary Mutual Funds (DMFs) were made in 2007. APRA began collecting data from DMFs in 2008, with information from the collection to be used to allow the Government to better understand the use and operation of DMFs within the Australian market.
In 2015, APRA assessed its non-prudential data collection and determined that APRA had minimal prudential use for the industry-wide data provided by DMFs. Consistent with APRA’s commitment to look for opportunities to reduce compliance costs for business and the community, APRA considers that the benefit obtained from the use of the data collection no longer outweighs the reporting costs to DMFs. Consequently, APRA is revoking all the relevant reporting standards and their associated reporting forms:
- Reporting Standard DRS 1.0 Notification;
- Reporting Standard DRS 1.1 – Notification by AFS Licence holders;
- Reporting Standard DRS 100.0 Insurance and Sundry Information;
- Reporting Standard DRS 210.0 Outstanding Claims Liabilities;
- Reporting Standard DRS 300.0 Statement of Financial Position;
- Reporting Standard DRS 310.0 Statement of Financial Performance;
- Reporting Standard DRS 310.1 Gross Earned Contribution Revenue and Insurance Expense;
- Reporting Standard DRS 310.2 Claims Expense and Insurance Recoveries;
- Reporting Standard DRS 310.3 Insurance by Class; and
- Reporting Standard DRS 310.4 Other Information.
2. Purpose and operation of the instrument
The purpose of the instrument is to revoke the reporting standard listed above. The data collected under these reporting standards is no longer required, and the revocation of the reporting standards will reduce the reporting burden of DMFs.
3. Consultation
APRA undertook a four week consultation on its proposed revocation of the reporting standards between 2 September 2016 and 30 September 2016. APRA received three submissions from the DMFs.
The consultation provided clear communication to the industry on APRA’s proposal to cease collection and APRA’s position on the benefits obtained verses the cost involved in collecting this information. Of the three submissions received, two submissions acknowledged APRA’s proposal and supported the revocation of the above listed reporting standards.
APRA has also consulted with Treasury on the proposed revocation of the reporting standards and has no objections to the proposal.
4. Regulatory Impact Statement
APRA has consulted with the Office of Best Practice Regulation (OBPR) and the OBPR has confirmed that a Regulatory Impact Statement (RIS) is not required.
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
Human Rights (Parliamentary Scrutiny) Act 2011
Financial Sector (Collection of Data) (reporting standard) determinations No. 35 of 2016
This legislative instrument is 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
This legislative instrument revokes the reporting standards that apply to Discretionary Mutual Funds (DMFs) for the purposes of collecting data.
Human rights implications
APRA has assessed this instrument against the international instruments listed in section 3 of the HRPS Act and has determined 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.
The instrument removes particular reporting obligations for DMFs, and does not have any direct or indirect effects on the rights of 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, this 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.