First Home Saver Accounts Providers (RSE licensees only) (prudential standard) determination No. 1 of 2008
EXPLANATORY STATEMENT
Prepared by the Australian Prudential Regulation Authority (APRA)
First Home Saver Accounts Act 2008, paragraph 121(1)(a)
Under paragraph 121(1)(a) of the First Home Saver Accounts Act 2008 (the FHSA Act), APRA has the power to determine standards (prudential standards), in writing, in relation to prudential matters to be complied with by registrable superannuation entity licensees (RSE licensees) that are First Home Saver Accounts Providers (FHSA Providers). Under subsection 121(5) of the Act, APRA may, in writing, vary or revoke a prudential standard.
First Home Saver Accounts (Prudential Standard) determination No. 1 of 2008 determined Prudential Standard FPS 100 First Home Saver Accounts Providers (RSE licensees only) to take effect on 1 October 2008.
- Background
The FHSA Act came into effect on 26 June 2008 and provides for First Home Saver Accounts to be opened or issued on or after 1 October 2008.
The FHSA Act allows for prudentially regulated institutions that are public offer and extended public offer licensees (collectively referred to as RSE licensees), life insurance companies, and authorised deposit-taking institutions (ADIs) to provide First Home Saver Accounts (FHSAs). APRA is tasked with ensuring that a robust prudential reporting framework is in place for the effective regulation of FHSA providers.
As FHSAs will be provided by authorised RSE licensees under a separate trust structure from their superannuation operations, limited new prudential requirements are needed. The prudential standard will apply to all RSE licensees authorised to provide FHSAs. The prudential standard aims to ensure that RSE licensees that offer FHSAs have adequate systems, policies and procedures in place to address the risks associated with their FHSA activities. Specifically, it sets out requirements in respect of fitness and propriety, risk management, resources, outsourcing and investments. Similar requirements already apply to authorised deposit-taking institutions and life insurers.
The prudential standard will not apply to RSE licensees’ superannuation operations, which will continue to be regulated by the Superannuation Industry (Supervision) Act 1993 and related operating standards.
2. Purpose of the instrument
The instrument aims to ensure that RSE licensees that are FHSA providers have adequate systems, policies and procedures to adequately address the risks associated with their FHSA activities.
3. Operation of the Instrument
The First Home Saver Accounts (Prudential Standard) determination No. 1 of 2008 is made to make the Prudential Standard FPS 100 First Home Saver Accounts Providers (RSE licensees only).
4. Consultation
APRA consulted with industry in relation to the prudential standard.
Regulatory Impact Statement
A Regulatory Impact Statement is not required because an application for authorisation as an FHSA provider is at the election of each entity.