AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AMENDMENT REGULATION 2012 (NO. 1) (SLI NO 113 OF 2012) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY AMENDMENT REGULATION 2012 (NO. 1) (SLI NO 113 OF 2012)

Explanatory Statement

Select Legislative Instrument 2012 No. 113

Issued by the Authority of the Minister for Financial Services and Superannuation

Australian Prudential Regulatory Authority Act 1998

Australian Prudential Regulation Authority Regulation 2012 (No. 1)

Section 60 of the Australian Prudential Regulation Authority Act 1998 (the Act) provides that the Governor-General may make regulations prescribing matters which are required or permitted by the Act to be prescribed, or which are necessary or convenient to be prescribed in order to carry out or give effect to the Act.

Subsection 56(5)(a) of the Act allows APRA to disclose protected information in the course of its prudential supervision to a financial sector supervisory agency or a prescribed agency (including foreign agencies) specified in the Australian Prudential Regulation Authority Regulations 1998 (the Regulations). Protected information is information which APRA has obtained in relation to a prudential regulation framework law, relating to a financial sector entity, a related body corporate or a customer of certain classes of financial institutions.

Australia and APRA are members of a number of international agencies that have responsibilities for supervision and management of international financial system health and stability. These agencies include the Bank for International Settlements, the Basel Committee on Banking Supervision, the Financial Stability Board, the International Monetary Fund, and the World Bank Group. APRA is required to provide these agencies with data and information to assist their research, analysis and policy development. This contributes to international cooperation in the supervision and financial stability of the global financial system.

APRA can currently disclose protected information to each of these agencies by making an instrument under subsection 56(5)(b) of the Act each time it provides information. The proposed Regulation will improve the efficiency of APRA sharing information with the agencies by prescribing each of these agencies for the purposes of subsection 56(5)(a) of the Act. This removes the additional requirement and harmonises APRA's powers to share information with these agencies. Details of the Regulation are set out in Attachment.

Treasury considers that consultation on the proposed Regulation is not necessary, as the proposed Regulation is of a minor or machinery nature. They do not alter the substance of APRA's powers to disclose protection information to the international agencies, but rather the mechanism by which that information is shared. The Office of Best Practice Regulation has agreed with this assessment and advised that a Regulation Impact Statement is not required.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulation commences on the day after it is registered.

Attachment

Details of the proposed Australian Prudential Regulation Authority Amendment Regulation 2012 (No. 1)

Section 1 - Name of Regulation

This section specifies the name of the Regulation as the Australian Prudential Regulation Authority Amendment Regulation 2012 (No. 1)

Section 2 - Commencement

This section provides that the Regulation commence on the day after they are registered.

Section 3 - Amendment of Australian Prudential Regulation Authority

Regulations 1998

This section provides that Schedule 1 amends the Australian Prudential Regulation Authority Regulations 1998.

Schedule 1 - Amendments

Items 1 and 2 insert the Bank for International Settlements, the Basel Committee on Banking Supervision, the Financial Stability Board, the International Monetary Fund, and the World Bank Group into the list of prescribed agencies at Regulation 5 of the current Regulations. This will allow APRA to share information with the international agencies under subsection 56(5)(a) of the Act, rather than under 56(5)(b) of the Act.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Australian Prudential Regulatory Authority Act 1998

Australian Prudential Regulation Authority Amendment Regulation 2012 (No. 1)

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Subsection 56(5)(a) of the Australian Prudential Regulatory Authority Act 1998 (the Act) allows APRA to disclose protected information in the course of its prudential supervision to a financial sector supervisory agency or a prescribed agency (including foreign agencies) specified in the Australian Prudential Regulation Authority Regulations 1998. Protected information is information which APRA has obtained in relation to a prudential regulation framework law, relating to a financial sector entity, a related body corporate or a customer of certain classes of financial institutions.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

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