Financial Sector (Collection of Data) (reporting standard) determination No. 7 of 2017

Administered by Department of the Treasury

Legislation au F2017L00726 In force Legislative Instrument

Legislation content

Financial Sector (Collection of Data) (reporting standard) determination Nos. 6 - 12 of 2017

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 21 June 2017, APRA made the following Financial Sector (Collection of Data) (reporting standard) determinations (the instruments):

(1)          No. 6 of 2017 which:

(i)            revokes Reporting Standard SRS 330.0 Statement of Financial Performance (SRS 330.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 36 of 2015; and

(ii)         determines Reporting Standard SRS 330.0 Statement of Financial Performance;

(2)          No. 7 of 2017 which:

(i)            revokes Reporting Standard SRS 330.1 Statement of Financial Performance (SRS 330.1) made under Financial Sector (Collection of Data) (reporting standard) determination No. 28 of 2015; and

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

(3)          No. 8 of 2017 which:

(i)            revokes Reporting Standard SRS 330.2 Statement of Financial Performance (SRS 330.2) made under Financial Sector (Collection of Data) (reporting standard) determination No. 8 of 2015; and

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

(4)          No. 9 of 2017 which:

(i)            revokes Reporting Standard SRS 610.0 Membership Profile (SRS 610.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 18 of 2015; and

(ii)         determines Reporting Standard SRS 610.0 Membership Profile;

(5)          No. 10 of 2017 which:

(i)            revokes Reporting Standard SRS 610.1 Changes in Membership Profile (SRS 610.1) made under Financial Sector (Collection of Data) (reporting standard) determination No. 19 of 2015; and

(ii)         determines Reporting Standard SRS 610.1 Changes in Membership Profile;

(6)          No. 11 of 2017 which:

(i)            revokes Reporting Standard SRS 720.0 ABS Statement of Financial Position (SRS 720.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 42 of 2015; and

(ii)         determines Reporting Standard SRS 720.0 ABS Statement of Financial Position; and

(7)          No. 12 of 2017 which:

(i)            revokes Reporting Standard SRS 800.0 Financial Statements (SRS 800.0) made under Financial Sector (Collection of Data) (reporting standard) determination No. 24 of 2015; and

(ii)         determines Reporting Standard SRS 800.0 Financial Statements.

These instruments commence on 1 July 2017.

  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 is used by APRA to assist with APRA’s supervisory functions, and also by Government and other agencies such as the Australian Bureau of Statistics and the Australian Securities and Investments Commission.

The Government proposed a series of superannuation measures as part of the 2016/17 Budget announced in May 2016. Legislation to enact a number of these measures passed Parliament in November 2016 with the measures taking effect between 1 January 2017 and 1 July 2018. The majority of the Budget measures are taxation related; some of the measures, however, necessitate changes to APRA’s reporting framework.

2.      Purpose and operation of the instruments

The purpose of making these instruments is to amend SRS 330.0, SRS 330.1, SRS 330.2, SRS 610.0, SRS 610.1, SRS 720.0 and SRS 800.0 to ensure consistency with the Government’s Budget measures and that APRA’s reporting framework is up to date.

SRS 330.0 will be amended to reflect the Government’s abolition of the Low Income Superannuation Contribution (LISC) and introduction of the Low Income Superannuation Tax Offset (LISTO). The LISTO refunds tax paid on concessional contributions by individuals with a taxable income of up to $37,000, up to a cap of $500. This change necessitates a change in the name and definition of item 1.2.4 of the form and instructions of SRS 330.0; in addition, some consequential and very minor changes have been made to this reporting standard. While the amending legislation (Schedule 4 of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016) becomes effective on 2 July 2017, application of the amended SRS 330.0 from 1 July 2017 will have no adverse impact on reporting of LISTO amounts, as LISTO amounts are not paid on 1 July.

SRS 330.1, SRS 330.2, SRS 720.0 and SRS 800.0 will have a minor amendment made to the definition of ‘Member contribution’ for consistency with a corresponding change made to SRS 330.0 and will also apply for reporting periods ending on or after 1 July 2017.

SRS 610.0 and SRS 610.1 will be amended to reflect the Government’s introduction of the $1.6 million transfer balance cap and the concept of member balances being in the ‘retirement phase’ or the ‘accumulation phase’. The $1.6 million transfer balance cap is a limit (to be indexed) placed on the amount that a member can transfer into the retirement phase, with earnings on these amounts to be tax-free. Conversely, the earnings on member balances in the accumulation phase will be subject to tax at the concessional rate. These changes necessitate changes to the instructions in item 3 of SRS 610.0 and item 5 of SRS 610.1 to amend the definitions of ‘tax-free phase’ and ‘taxed phase’, and the removal from item 3 of the instructions in SRS 610.0 of the reference to ‘transition to retirement’ as being in the tax-free phase. The amending legislation (Schedule 1 and Schedule 11 of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016) took effect from 1 January 2017 and affects only the definitions for items in the reporting standard.

Two additional changes unrelated to the Government’s Budget measures are included in this package to provide additional clarification to industry and to improve the quality of the data reported to APRA. The specific instructions to items 1 to 5 in SRS 610.1 have been updated to state that the transfer of member interests within an existing RSE are not to be reported as new accounts in the RSE. Item 11 in SRS 720.0 has been amended to change the definition of ‘Receivables and other financial assets’ to clarify that future income tax benefits should not be excluded from this amount, following advice from the ABS as the users of this data.

3.      Consultation

APRA previously consulted on SRS 330.0 and SRS 720.0 during 2015.

APRA previously consulted on SRS 330.1, SRS 330.2, SRS 610.0, SRS 610.1 and SRS 800.0 during 2012-2013 and subsequently released revised final versions of these standards during 2015 (with minor amendments only).

APRA has determined that it is not necessary to publicly consult on these revisions as they are very minor in nature and are chiefly in response to the Government’s introduction of the 2016/17 Budget measures.

5.  Regulation Impact Statement

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

6. 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 Nos. 6 - 12 of 2017 – Reporting Standard SRS 330.0 Statement of Financial Performance (SRS 330.0), Reporting Standard SRS 330.1 Statement of Financial Performance (SRS 330.1), Reporting Standard SRS 330.2 Statement of Financial Performance (SRS 330.2), Reporting Standard SRS 610.0 Membership Profile (SRS 610.0), Reporting Standard SRS 610.1 Changes in Membership Profile (SRS 610.1), Reporting Standard SRS 720.0 ABS Statement of Financial Position (SRS 720.0) and Reporting Standard SRS 800.0 Financial Statements (SRS 800.0)

These 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 make minor revisions to SRS 330.0, SRS 330.1, SRS 330.2, SRS 610.0, SRS 610.1, SRS 720.0 and SRS 800.0 to amend the existing reporting requirements to ensure consistency with the introduction of the Government’s 2016/17 Budget measures. The reporting standards require the reporting of superannuation fund data on an aggregated basis and do not require the reporting of any personal information.

 

Human rights implications

APRA has assessed these instruments and is of the view that they do not engage any of the applicable rights or freedoms recognised or declared in the international instrument listed in section 3 of the HRPS Act. Accordingly, in APRA’s assessment, the instruments are compatible with human rights.

Conclusion

These Legislative Instruments are compatible with human rights as they do not raise any human rights issues.

 

 

Overview

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 6 - 12 of 2017 were enacted to amend existing reporting requirements in order to align them with the Government's 2016/17 Budget measures. These legislative instruments, made by the Australian Prudential Regulation Authority (APRA), modify various reporting standards to reflect recent changes in superannuation policy, such as the abolition of the Low Income Superannuation Contribution (LISC) and the introduction of the Low Income Superannuation Tax Offset (LISTO), as well as the implementation of the $1.6 million transfer balance cap. The policy objective of these amendments is to ensure that APRA's reporting framework is consistent with the new superannuation measures, thereby facilitating effective supervision and data collection for regulatory purposes. These determinations, which came into effect on 1 July 2017, aim to enhance the quality and relevance of data reported by financial sector entities to APRA.

Scope and Application

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 6 - 12 of 2017, prepared by the Australian Prudential Regulation Authority (APRA) under the Financial Sector (Collection of Data) Act 2001, pertain to financial sector entities required to submit specified financial and accounting data to APRA. These entities include authorised deposit-taking institutions, registered financial institutions, authorised self-managed superannuation fund (SMSF) auditors, and other entities regulated by APRA. The determinations focus on updating and aligning reporting standards with the 2016/17 Budget measures, particularly those concerning superannuation contributions and transfer balance caps. The instruments apply nationally and are effective from 1 July 2017. While the Act does not specify exclusions or exemptions, the determinations themselves may provide certain exclusions based on their specific content. The Act allows for the revocation of previous reporting standards and the introduction of new ones, as evidenced by the revocation of older standards and the introduction of updated ones in these determinations.

Key Provisions

The Financial Sector (Collection of Data) (reporting standard) determination Nos. 6 - 12 of 2017, issued by the Australian Prudential Regulation Authority (APRA), amend several existing reporting standards to ensure they align with the Government’s recent budgetary measures, specifically those introduced as part of the 2016/17 Budget. These determinations, which came into effect on 1 July 2017, primarily update the reporting standards to reflect changes such as the abolition of the Low Income Superannuation Contribution (LISC) and the introduction of the Low Income Superannuation Tax Offset (LISTO). Additionally, the amendments address the new $1.6 million transfer balance cap and the concept of member balances being in the ‘retirement phase’ or the ‘accumulation phase’. These changes necessitate updates to the names, definitions, and instructions within the reporting standards, ensuring that the data collected aligns with the new legislative framework. These determinations impose specific obligations on financial sector entities, particularly those that are regulated institutions. They must adhere to the updated reporting standards outlined in the determinations, ensuring that the data they report is consistent with the revised definitions and instructions. For example, entities must now report on LISTO amounts under the updated SRS 330.0, and they must accurately reflect the new phases of member balances in their reports. These obligations are critical to maintaining the integrity and usefulness of the data collected by APRA, which is essential for regulatory oversight and policy-making. Failure to comply with these determinations can result in various consequences. While the specific penalties are not detailed in the determinations, non-compliance with APRA’s reporting standards generally can lead to enforcement actions. These actions may include financial penalties, corrective measures, and in severe cases, legal proceedings. The exact penalties would depend on the nature and severity of the breach, but they are intended to ensure that entities adhere to the regulatory requirements. It is important for entities to understand and comply with these standards to avoid potential regulatory repercussions.

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