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AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AMENDMENT REGULATIONS 1999 (NO. 1) 1999 NO. 141
EXPLANATORY STATEMENTStatutory Rules 1999 No. 141
Issued by the Authority of the Minister for Financial Services and Regulation
Australian Prudential Regulation Authority Act 1998
Australian Prudential Regulation Authority Amendment Regulations 1999 (No. 1)
Section 60 of the Australian Prudential Regulation Authority Act 1998 (the Act) provides that the GovernorGeneral may make regulations for the purposes of the Act.
These regulations constitute part of the second stage of the financial system reforms involving the transfer of State and Territory-based deposit-taking institutions including friendly societies, building societies, credit unions and special services providers (SSPs) to the Commonwealth prudential regulatory regime. These follow on from amendments to the Banking Act 1959 (the Banking Act), the Life Insurance Act 1975 (the Life Act) and other transitional provisions made in the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 (the FSR Act) which were designed to accommodate the transferring institutions within the Commonwealth regime.
In its role as one of a number of regulators of the financial system, the Australian Prudential Regulation Authority (APRA) may have cause to disclose protected documents or protected information in the course of performing its functions or exercising its powers, and in assisting other bodies to efficiently and effectively perform their functions.
Paragraph 56(5)(a) of the Act makes provision for APRA to provide information to fellow financial sector supervisory agencies (a term defined in s56). Moreover, paragraph 56(5)(a) makes provision for APRA to share protected information with any other agency that is listed in the regulations. .
These regulations made under paragraph 56(5)(a) with respect to section 60 of the Act lists the following agencies as those to whom APRA may disclose protected material:
the Private Health Insurance Administration Council (PHIAC), and the Department of Health and Aged Care (DoHAC);
The Life Insurance Amendment Regulations 1999 modify the application of the Life Insurance Act 1995 for jointly regulated friendly societies (ie. those that undertake both life insurance and health insurance business). One of the consequences of the joint regulation of these entities will be the need to ensure effectual information exchange between the regulators of jointly regulated friendly societies. PHIAC and DoHAC are the two regulators of health insurance providers under the National Health Act.
* the Reserve Bank of Australia (RBA);
To remove any uncertainty, the regulations include the RBA as an agency with whom APRA can share information. This will facilitate the transfer to the RBA of data collected under the Banking (Statistics) Amendment Regulations 1999, and other information related to financial sector regulation.
* the Australian Bureau of Statistics (ABS);
The ABS conducts a quarterly survey of superannuation on behalf of APRA, and also receives quarterly statistics from AFIC on building societies and credit unions; the results of which provide the basis for analysis and public reporting of trends in these industries. APRA has also historically provided the ABS with financial data in relation to insurance and banking, and wishes to continue doing so in the future.
* the Australian Federal Police (AFP) and Police forces of each State and Territory; and
- In circumstances involving fraud, urgent reference of these matters to the State and Federal Police may be necessary to avoid removal of assets. In this instance, time is critical and delay in having to arrange authorisation for information release may prove costly.
* the Australian Taxation Office (ATO) (in relation to superannuation legislation only).
Information exchange between the ATO and the Insurance and Superannuation
Commission (ISC) (the regulator from which APRA was created on 1 July 1998) on
superannuation matters was allowed under s346 of the Superannuation Industry
(Supervision) Act 1993 (the SIS Act) before the repeal of that section. The repeal of that
section means that the explicit ability to pass protected information and documents obtained
under the SIS Act to the ATO has been lost. The taxation incentives linked to
superannuation products make it necessary for APRA to pass information to the ATO for
the administration of taxation legislation. In addition, under the Superannuation Legislation
Amendment Bill (No. 3) 1999 there will be a transfer of regulatory responsibility from
APRA to the ATO for self-managed (excluded) funds. This transfer is expected to take
place later in 1999.
For these purposes, superannuation legislation is defined as the following: the
Retirement Savings Accounts Act 1997; the Superannuation Industry (Supervision)
Act 1993; and the Superannuation (Excluded Funds) Taxation Act 1997.
Details of the regulations appear at Attachment A.
The regulations commence on the transfer date as defined in Regulation 2.
ATTACHMENT A
Australian Prudential Regulation Authority Amendment Regulations 1999 (No. 1)
Regulation 1 - Name of Regulations
Regulation 1 provides that these regulations are the Australian Prudential Regulation Authority Amendment Regulations 1999 (No. 1)
Regulation 2 - Commencement
Regulation 2 provides that these regulations commence on the commencement of Schedule 4 of the
Financial Sector (Amendment and Transitional Provisions) Act 1999.
Regulation 3 - Amendment of Australian Prudential Regulation Authority Regulations 1998
Regulation 3 provides that the Australian Prudential Regulation Authority Regulations 1998 (the
Principal Regulations) are amended as set out in Schedule 1.
Schedule 1
Item [1] - Secrecy - disclosure of protected information or production of protected document to specified agencies (Act s56(5))
Item 1 inserts into the Principal Regulations, Regulation 5 which lists, for the proposes of paragraph 56(5)(a) of the Act, the agencies which whom APRA is permitted to exchange protected information or protected documents.