EXPLANATORY STATEMENT

 

Select Legislative Instrument 2007 No. 158

 

Issued by the Authority of the Minister for Finance and Administration

 

Financial Management and Accountability Act 1997

 

Financial Management and Accountability Amendment Regulations 2007 (No. 3) (the Regulations)

 

The Financial Management and Accountability Act 1997 (the FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies.

Subsection 65(1) of the FMA Act provides that the Governor-General may make regulations prescribing matters required or permitted by the FMA Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FMA Act.

Section 5 of the FMA Act provides that for the purposes of the FMA Act, a prescribed Agency means a body, organisation or group of persons prescribed by the regulations for the purposes of that definition. Agencies are prescribed in Schedule 1 to the Financial Management and Accountability Regulations 1997 (the Principal Regulations). Schedule 1 is divided into Part 1 which prescribes agencies that do not handle money other than public money and Part 2 which prescribes agencies that handle money other than public money.

The Regulations prescribe the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Corporations and Markets Advisory Committee (CAMAC) in Part 1 of Schedule 1 to the Principal Regulations.

 

Upon commencement of Schedules 1 and 2 of the Governance Review Implementation (Treasury Portfolio Agencies) Act 2007 (Treasury Portfolio Agencies Act), APRA, ASIC and CAMAC will cease to be Commonwealth authorities under the Commonwealth Authorities and Companies Act 1997. APRA, ASIC and CAMAC will instead become prescribed agencies under the FMA Act that do not handle money other than public money. In addition, upon commencement of Schedules 1 and 2 to the Treasury Portfolio Agencies Act, ASIC will cease to be a Commonwealth authority that also handles money other than public money under the FMA Act.

 

This follows an assessment of the governance of APRA, ASIC and CAMAC against the principles contained in the Review of the Corporate Governance of Statutory Authorities and Office Holders by Mr John Uhrig AC (Uhrig Review), which recommended that the governance of APRA, ASIC and CAMAC be moved into alignment with executive management arrangements, consistent with the FMA Act. Prescribed agencies are financially autonomous from their respective departments and responsible, under the FMA Act, for the proper management of public money and public property within their control or custody.

 

Accordingly, the Regulations amend the Principal Regulations to prescribe APRA, ASIC and CAMAC in Part 1 of Schedule 1 and remove the entry of ASIC in Part 2 of Schedule 1.

 

Further details of the Regulations are in the Attachment.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

In accordance with section 17 of the Legislative Instruments Act 2003 we consulted with The Treasury. No further consultation was undertaken in relation to the Regulations as they are of a minor or machinery nature and do not substantially alter existing arrangements.

 

Regulations 1, 2 and 3 commence the day after the proposed Regulations are registered. Schedule 1 to the proposed Regulations commences on the later of 1 July 2007 and the commencement of Schedules 1 and 2 of the Treasury Portfolio Agencies Act.

ATTACHMENT

 

Details of the Financial Management and Accountability Amendment Regulations 2007 (No. 3)

 

Regulation 1 - Name of Regulations

 

This regulation provides that the title of the Regulations is the Financial Management and Accountability Amendment Regulations 2007 (No. 3).

 

Regulation 2 – Commencement

 

This regulation provides for the commencement of the Regulations as follows:

·          Regulations 1, 2 and 3 to commence the day after the Regulations are registered; and

·          Schedule 1 to commence on the later of 1 July 2007 and the commencement of Schedules 1 and 2 of the Governance Review Implementation (Treasury Portfolio Agencies) Act 2007 (Treasury Portfolio Agencies Act).

 

Regulation 3 - Amendment of the Financial Management and Accountability Regulations 1997

This regulation provides that the Financial Management and Accountability Regulations 1997 (Principal Regulations) are amended as set out in Schedule 1.

Schedule 1

Item [1] – Schedule 1, Part 1

This amendment prescribes the Australian Prudential Regulation Authority (APRA) in Part 1 of Schedule 1 to the Principal Regulations, after item 114AB. As a result APRA becomes a prescribed agency that does not handle money other than public money under the Financial Management and Accountability Act 1997 (FMA Act).

Item [2] – Schedule 1, Part 1

This amendment prescribes the Australian Securities and Investments Commission (ASIC) in Part 1 of Schedule 1 to the Principal Regulations, after item 115. As a result ASIC becomes a prescribed agency that does not handle money other than public money under the FMA Act.

Item [3] – Schedule 1, Part 1

This amendment prescribes the Corporations and Markets Advisory Committee (CAMAC) in Part 1 of Schedule 1 to the Principal Regulations, after item 122. As a result CAMAC becomes a prescribed agency that does not handle money other than public money under the FMA Act.

Item [4] – Schedule 1, Part 2

This amendment removes the entry related to ASIC from Part 2 of Schedule 1 to the Principal Regulations as ASIC will cease to handle money other than public money under the FMA Act on commencement of the Regulations.

 

Item [5] – Schedule 1, Part 2

This amendment updates the wording of the note in Part 2 of Schedule 1 to the Principal Regulations, given that the removal of the ASIC entry by item [4] will leave only one entry in Part 2 of Schedule 1.