Overview

The Instrument Fixing Charges to be Paid to APRA No 3 of 2004, compiled by the Australian Prudential Regulation Authority (APRA) and taking into account subsequent amendments, was enacted to address the need for regulated charges for applications and services related to foreign banks establishing representative offices in Australia. This legislative instrument was issued under the Australian Prudential Regulation Authority Act 1998, with the objective of establishing clear and transparent fee structures for the services provided by APRA to foreign banks. The instrument specifies charges for applications and monitoring services, with provisions for pro-rated charges based on the duration of the bank’s presence in Australia, and conditions under which charges may be waived, such as for central banks. This approach ensures that the regulatory framework is both fair and adequately funded to support APRA’s oversight responsibilities.

Scope and Application

This legislative instrument, prepared by the Australian Prudential Regulation Authority (APRA), pertains to the charges that foreign banks must pay to APRA for the establishment and monitoring of their representative offices in Australia. The Act applies specifically to foreign banks that seek APRA's consent to establish a representative office in Australia, as outlined under the Banking Act 1959. The charges are fixed for the application process and for the ongoing monitoring of the foreign banks' operations and compliance with the conditions set by APRA. The charges are not applicable if the foreign bank is a central bank, in which case APRA may waive these charges. The legislative instrument also outlines the geographic reach, which is limited to Australia, and specifies the payment terms and conditions, including the non-refundable nature of the application fee if the consent is refused. This legislative instrument amends previous charges set by APRA and includes provisions for the charges to be prorated if the foreign bank establishes an office partway through a financial year, but not if they cease operations before the end of the year.

Key Provisions

The principal instrument outlines specific charges to be paid to the Australian Prudential Regulation Authority (APRA) for the consent to establish a representative office in Australia and the monitoring of such an office by a foreign bank (section 1). Under section 1(1) of the Schedule, the foreign bank must pay a non-refundable charge of $3,300 for an application for APRA's consent to establish an office in Australia, with the payment due upon lodging the application. Additionally, section 1(2) imposes a monitoring charge of $5,500 per financial year per foreign bank. This charge is pro-rated if the foreign bank establishes an office partway through the financial year but remains at the full amount if the bank ceases operations before the end of the financial year. Payments are due 28 days after receiving APRA's invoice, with invoicing occurring either when the office is established within the financial year or at the beginning of the financial year if the office was present at the start. The obligations imposed by this legislation require foreign banks to submit applications and pay the specified charges to APRA. Specifically, the foreign bank must submit an application for APRA's consent to establish a representative office in Australia, accompanied by the required non-refundable charge of $3,300 (section 1(1)). Furthermore, the foreign bank must pay the monitoring charge of $5,500 per financial year if it maintains an office in Australia (section 1(2)). If the foreign bank is a central bank, APRA may waive the charges (Schedule, notes). The legislation provides for certain consequences in the event of non-compliance with the imposed charges. While specific penalties for non-payment or failure to comply with the charge requirements are not explicitly stated in the instrument, breaches of such obligations could potentially lead to enforcement actions by APRA, including but not limited to, administrative penalties or other regulatory actions as outlined under the Australian Prudential Regulation Authority Act 1998. Given the non-refundable nature of the application charge, failure to pay this charge would result in the refusal of the application, effectively preventing the establishment of a representative office in Australia.