Retirement Savings Accounts Regulations (Amendment) 1998 No. 192
EXPLANATORY MEMORANDUM
Statutory Rules 1998 No. 192
Minute No. 192 of 1998 - Treasurer
Subject - Retirement Savings Accounts Act 1997
Retirement Savings Accounts Regulations (Amendment)
Section 200 of the Retirement Savings Accounts Act 1997 empowers the Governor-General to make Regulations prescribing matters required or permitted by the Act to be prescribed or prescribing matters necessary or convenient to be prescribed for carrying out the Act.
The proposed Regulations will make amendments necessary as a consequence of the Financial Sector Reform legislation, including:
* omitting references to the Insurance and Superannuation Commissioner (a
position which is to be abolished from 1 July 1998) and replacing them with
references to the Australian Prudential Regulation Authority (APRA) (which
will, from that date, be responsible for the prudential regulation of retirement
savings accounts) (proposed Regulations 3, 4, 6-13, 18);
* omitting a requirement to consult the Reserve Bank before APRA makes certain
key decisions in relation to retirement savings accounts issued by banks
(because the prudential regulation of banks will, on 1 July 1998, pass from the
Reserve Bank to APRA) (proposed Regulation 14);
* omitting regulations which will have no function after the commencement of
the Financial Sector Reform legislation (proposed Regulations 15 - 17).
The Financial Sector Reform legislation is the Government's response to the report of the Financial System Inquiry (the Wallis Committee) and includes the Australian Prudential Regulation Authority Act 1998, the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 and the Financial Sector Reform (Consequential Amendments) Act 1998.
To the extent that it is relevant to the amendments to the Retirement Savings Accounts Regulations, the Financial Sector Reform legislation:
* abolishes the Insurance and Superannuation Commissioner;
* establishes the Australian Prudential Regulation Authority to undertake the
prudential regulation of deposit-taking institutions, insurance companies
and superannuation entities; and
* enlarges the role of the Australian Securities Commission, which is renamed the
Australian Securities and Investments Commission, so that it oversees consumer protection
and market integrity in the financial sector (including superannuation and insurance).
The current role of the Insurance and Superannuation Commissioner is thus divided between the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission. In addition, these bodies will receive certain functions previously carried out by the Reserve Bank and the Australian Competition and Consumer Commission respectively.
Details of the proposed amendments are attached- Attachment A.
The proposed regulations commence on 1 July 1998.
The Office of Regulation Review has advised that preparation of a Regulation Impact Statement in relation to these proposed regulations is not necessary.
The Minute recommends that the Regulations be made in the form proposed.
Authority: Section 200 of the Retirement
Savings Accounts Act 1997.
ATTACHMENT A
Retirement Savings Accounts Regulations
Proposed Regulation 1 - Commencement
Proposed Regulation 1 provides that the regulations commence on 1 July 1998.
Proposed Regulation 2 - Amendment
Proposed Regulation 2 provides that the Retirement Savings Accounts Regulations are amended as set out in these regulations.
Proposed Regulation 3. 4, 6. 7, 8, 9. 10, 11, 12, 13, 18 - Regulations 1.03, 2.12 4.22A, 4.27. 4.30, 6.01. 6.02, 6.03, Division 6.3 heading. 6.08, Schedule 2 (references to Insurance and Superannuation Commissioner)
As indicated above, the Australian Prudential Regulation Authority will take over the prudential regulation of those bodies previously supervised by the Insurance and Superannuation Commissioner while the Australian Securities and Investments Commission will oversee consumer protection and market integrity in relation to those bodies and other parts of the financial sector.
For this purpose, the legislation previously administered by the Insurance and Superannuation Commissioner has been examined and provisions assigned to the relevant new regulator in the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998.
Regulations 1.03, 2.12, 4.22A, 4.27, 4.30, 6.01, 6.02, 6.03, 6.08, Schedule 2 and the heading of Division 6.3 relate to matters which are assigned to the Australian Prudential Regulation Authority. The proposed amendments will therefore change the appropriate references from the Insurance and Superannuation Commissioner to references to APRA (the Australian Prudential Regulation Authority) (proposed Regulations Regulation 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 18).
Proposed Regulation 5 - Regulation 4.01 (Interpretation)
The amendment makes a minor change of no consequence, omitting "1994-1995" and substituting "1994-95".
Proposed Regulation 14 - Regulation 6.12 (Prescribed regulatory agencies)
Regulation 6.12 prescribes a number of regulatory agencies for various purposes. For example, the Regulator (currently the Insurance and Superannuation Commissioner but, after 1 July 1998, the Australian Prudential Regulation Authority) must consult the prescribed agency, if any, before he, she or it can be satisfied that the applicant cannot be relied on to conduct retirement savings accounts in accordance with the Act and the regulations.
Regulation 6.12(a) states 'in the case of banks - Reserve Bank of Australia'.
After 1 July 1998, this will no longer be appropriate as the Australian Prudential Regulation Authority, and not the Reserve Bank of Australia, will be responsible for the prudential regulation of banks.
It is therefore proposed that the paragraph be omitted.
Proposed Regulation 15 - Regulation 6.18 (Report of inspector - prescribed agencies)
Subparagraph 114(3)(c)(iv) of the Act empowers the administering agency (currently the Insurance and Superannuation Commissioner, but, from 1 July 1998, the 'Regulator') to provide a report of an investigation to certain named agencies or 'a prescribed agency'.
The 'Regulator', in this context, is defined in Item 10 of Schedule 15 of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 as the Australian Prudential Regulation Authority, in relation to provisions it administers, and the Australian Securities and Investments Commission, in relation to provisions it administers. Item 3 of that Schedule lists the parts and sections of the Act for which each Regulator is responsible.
Subsection 114(3) is amended by Item 23 of the same Schedule to require the Regulator to give a copy of the report to the other Regulator.
Regulation 6.18 prescribes a number of agencies for this purpose of subparagraph 114(3)(c)(iv), including the Australian Securities Commission (paragraph 6.18(c)).
In view of the amendment to subsection 114(3), it is no longer necessary to prescribe the Australian Securities Commission for this purpose.
It is therefore proposed that paragraph 6.18(c) be omitted.
Proposed Regulation 16 and 17 - Regulations 6.20 (Definition of 'financial sector supervisory agency') and 6.21 (Definition of 'law enforcement agency')
Section 191 of the Act relates to secrecy.
It has been omitted by Item 28, Schedule 15 of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998.
The reason is that, after 1 July 1998, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission will be responsible for the administration of this Act. The legislation establishing both of these bodies includes provisions relating to secrecy and the exchange of information.
It is therefore proposed that Regulations 6.20 and 6.2 1, which prescribe particular bodies for the purpose of the secrecy provision, be omitted.