Financial Sector (Collection of Data) (reporting standard) determination
No.59 of 2008
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority
Financial Sector (Collection of Data) Act 2001, paragraph 13(1)(a)
Under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act), APRA has the power to determine (in writing) standards in relation to prudential matters to be complied with by all authorised deposit-taking institutions (ADIs), including Australian banks, foreign subsidiary banks, credit unions, building societies and branches of foreign banks.
Financial Sector (Collection of Data) (reporting standard) determination No.59 of 2008 makes Reporting Standard ARS 320.8 Housing Loan Reconciliation (ARS 320.8) to take effect from 1 September 2008.
1. Background
From 30 September 2008, APRA will collect housing loan reconciliation data under reporting form ARF 320.8 Housing Loan Reconciliation (ARF 320.8) from ADIs with total housing loan assets greater than $1 billion. APRA’s standardised electronic data collection system, Direct to APRA (D2A) provides for the processes and controls to collect, store, retrieve and report this data. The data will provide a greater understanding of housing lending activities and household balance sheets. The information will be used primarily by the RBA in monetary policy setting. A secondary use will be to provide greater granularity to APRA’s analysis of credit risk. The form is intended to capture data already internally available to each institution’s internal management.
2. Purpose of the instrument
Reporting standard ARS 320.8 and its associated reporting form and instructions will be issued under this determination. The collection of quarterly data under the FSCOD Act and using D2A will commence for the reporting period ending 30 September 2008.
3. Operation of the instrument
ARS 320.8 outlines the overall requirements for the provision of information to APRA relating to an ADI’s reconciliation of housing loans. It should be read in conjunction with reporting form ARF 320.8 and the associated instructions.
4. Consultation
APRA consulted in February 2008 with 30 ADIs who will, or are likely to be, required to submit ARF 320.8 on a quarterly basis. The consultation process involved the release of draft reporting standard, form and instructions. In general, the responses discussed the need for IT development and testing and suggested that APRA reconsider the commencement of reporting (then envisaged for April 2008). APRA agreed to delay the first collection of data until October 2008 (for the September quarter). A number of the responses also proposed specific areas for clarification, and APRA subsequently made some further changes to the instructions.
Overview
The Financial Sector (Collection of Data) (reporting standard) determination No.59 of 2008, issued by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, was enacted to address the need for improved data collection on housing loan reconciliations from authorised deposit-taking institutions (ADIs). This determination, effective from 1 September 2008, aims to enhance the understanding of housing lending activities and household balance sheets by requiring ADIs with housing loan assets exceeding $1 billion to submit quarterly data to APRA. The collected data, primarily intended for the Reserve Bank of Australia's monetary policy decisions, will also aid APRA in its credit risk analysis. The data collection process will utilise APRA's standardised electronic data collection system, Direct to APRA (D2A), ensuring robust processes and controls for data management. APRA engaged in consultations with relevant ADIs, adjusting the initial reporting schedule and refining the instructions based on feedback received.
Scope and Application
The Financial Sector (Collection of Data) (Reporting Standard) Determination No.59 of 2008, issued under the authority of the Financial Sector (Collection of Data) Act 2001, applies to authorised deposit-taking institutions (ADIs) such as Australian banks, foreign subsidiary banks, credit unions, building societies and branches of foreign banks with total housing loan assets exceeding $1 billion. The primary purpose of this determination is to establish Reporting Standard ARS 320.8 Housing Loan Reconciliation, which mandates the collection of housing loan reconciliation data from the specified ADIs starting from the reporting period ending 30 September 2008. This data collection will be facilitated through APRA’s standardised electronic data collection system, Direct to APRA (D2A). The information gathered will aid the Reserve Bank of Australia in monetary policy decisions and enhance APRA's analysis of credit risk. The determination ensures compliance with the FSCOD Act and outlines the requirements for the provision of information relating to an ADI’s reconciliation of housing loans, to be read in conjunction with the reporting form ARF 320.8 and associated instructions.
Key Provisions
The Financial Sector (Collection of Data) (reporting standard) determination No.59 of 2008 (section 1) mandates the commencement of Reporting Standard ARS 320.8 Housing Loan Reconciliation (section 2), effective from 1 September 2008. This determination is made under the authority of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act), specifically paragraph 13(1)(a), which empowers the Australian Prudential Regulation Authority (APRA) to set standards for prudential matters to be adhered to by authorised deposit-taking institutions (ADIs). The primary purpose of this determination is to facilitate the collection of housing loan reconciliation data, which will be gathered through the standardised electronic data collection system known as Direct to APRA (D2A). This data collection will begin for the reporting period ending 30 September 2008.
The obligations imposed by this determination on ADIs include the submission of housing loan reconciliation data to APRA via the D2A system. ADIs with total housing loan assets exceeding $1 billion are required to provide this data on a quarterly basis. The data to be submitted should encompass information already available to the institution’s internal management. This reporting is essential for enhancing the understanding of housing lending activities and household balance sheets, with the primary beneficiary being the Reserve Bank of Australia (RBA) for monetary policy purposes. APRA, as the regulator, will also benefit from this data for credit risk analysis.
Failure to comply with the requirements set out in the determination may result in penalties or other consequences as stipulated under the FSCOD Act. While the determination does not explicitly state penalties, non-compliance with reporting standards set by APRA could lead to enforcement actions under the Act, which might include fines or other regulatory measures. The Act provides for the imposition of financial penalties for breaches, and the severity of these penalties may vary depending on the nature and extent of the non-compliance. The consequences for not adhering to these standards could potentially impact the institution's regulatory standing and operational integrity.