Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Amendment (Definition of Smaller Lender) Direction 2020
I, Josh Frydenberg, Treasurer, give the following direction.
Dated 6 May 2020
Josh Frydenberg
Treasurer
Contents
1 Name
2 Commencement
3 Authority
4 Schedules
Schedule 1—Amendments
Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Direction 2020
1 Name
This instrument is the Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Amendment (Definition of Smaller Lender) Direction 2020.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this instrument | The day after this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under subsection 18(4) of the Structured Finance Support (Coronavirus Economic Response Package) Act 2020.
4 Schedules
Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments
Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Direction 2020
1 Section 4
Insert:
non‑ADI lender has the same meaning as in the Banking Act 1959.
2 Section 4 (definition of smaller lender)
Repeal the definition, substitute:
smaller lender means:
(a) an ADI that:
(i) is not able to access a term funding facility provided by the Reserve Bank of Australia using as collateral self‑securitised assets that are acceptable to the Bank; and
(ii) is not a subsidiary of another ADI where the other ADI is able to access such a term funding facility using as collateral such self‑securitised assets; or
(b) a non‑ADI lender; or
(c) a corporation that would be a non‑ADI lender if it were not excluded from being a registrable corporation (within the meaning of the Financial Sector (Collection of Data) Act 2001) by one or more of the following provisions of that Act:
(i) paragraph 7(2)(i);
(ii) paragraph 7(2)(ia);
(iii) paragraph 7(2)(j).
Overview
The Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Amendment (Definition of Smaller Lender) Direction 2020 was enacted to address a gap in the definition of 'smaller lender' under the Structured Finance Support (Coronavirus Economic Response Package) Act 2020. This instrument was introduced by the Treasurer, Josh Frydenberg, to provide clarity and ensure that the legislation could effectively support smaller lenders during the economic challenges posed by the COVID-19 pandemic. The Direction amends the definition of 'smaller lender' to include a more comprehensive range of entities, ensuring that the support mechanisms are accessible to those who need it most. This was done under the authority provided by subsection 18(4) of the aforementioned Act, with the intent of enhancing the operational efficiency and effectiveness of the economic response package.
Scope and Application
The Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Amendment (Definition of Smaller Lender) Direction 2020I, made by the Treasurer, applies to entities involved in the financial sector, specifically those eligible for support under the Coronavirus Economic Response Package. The Act amends the definition of a smaller lender for the purposes of the Structured Finance Support (Coronavirus Economic Response Package) Act 2020. It specifies that a smaller lender can be an authorised deposit-taking institution (ADI) unable to access a term funding facility from the Reserve Bank of Australia using self-securitised assets, a non-ADI lender, or a corporation that would be classified as a non-ADI lender if not excluded by certain provisions of the Financial Sector (Collection of Data) Act 2001. This legislative instrument commenced the day after its registration and applies nationally across Australia as a subordinate instrument under the authority of the aforementioned Act. There are no specific exclusions noted within this instrument, but its application may be subject to further clarification or modification through subsequent legislative amendments or subordinate instruments.
Key Provisions
The main operative sections of the Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Amendment (Definition of Smaller Lender) Direction 2020 (section 1) amend the definition of 'smaller lender' in the Structured Finance Support (Coronavirus Economic Response Package) (Delegation) Direction 2020 (section 4). This amendment clarifies that a 'smaller lender' can be an authorised deposit-taking institution (ADI) unable to access a term funding facility provided by the Reserve Bank of Australia using self-securitised assets as collateral, a non-ADI lender, or a corporation that would qualify as a non-ADI lender if not excluded by certain provisions of the Financial Sector (Collection of Data) Act 2001 (Schedule 1, item 2). The direction also specifies the commencement date of the instrument as the day after it is registered (section 2).
The Act imposes obligations on financial institutions, particularly smaller lenders, by providing a clear definition of who qualifies as such. This is crucial for the implementation of financial support measures under the Coronavirus Economic Response Package, ensuring that only eligible entities can access the support intended for smaller lenders (Schedule 1, item 2). Additionally, the Act mandates that the amendments take effect on the day following the registration of the instrument, ensuring timely and effective implementation of the changes (section 2).
The legislation does not explicitly state any offences, penalties, or consequences for breach. However, non-compliance with the amended definitions could potentially lead to entities being ineligible for the financial support measures, thereby missing out on the intended benefits. The lack of specific penalties in this direction suggests that the primary enforcement mechanism is ensuring that only eligible entities can claim the benefits of the support measures (Schedule 1, item 2).