Explanatory Memorandum(Circulated by authority of the Minister for Financial Services and Regulation, the Honourable J.B. Hockey, MP)
4 Explanation of items
The main purpose of Schedule 1 to the Bill is to expand and clarify APRA's functions undertaken as a result of an agreement with a State or Territory - subject to the Minister's or a delegate's approval.
The need to provide for an expansion of APRA's functions arose from discussions between Commonwealth, States and Territories about the supervisory arrangements for trustee companies and housing cooperatives. The Commonwealth, States and Territories have agreed that States and Territories will remain responsible for the regulation of trustee companies and cooperative housing societies (and any associated government guarantees), and they will be able to enter into an agreement for APRA to provide prudential regulation or advice services for these entities. Subject to the agreement of the Minister, APRA will provide these services on a fee for service basis, with the risk borne by the Commonwealth (and APRA) restricted to fulfilling the terms of the contract.
4.1 Schedule 1 will commence on the day the Bill receives Royal Assent, with the exception of Item 4 which will commence on the transfer date.
4.2 This item provides a definition of the phrase "prudential regulation or advice services" that APRA will be able to provide under its expanded functions.
4.3 Proposed subsection 9(b) clarifies the ways in which APRA can have powers or functions conferred on it from a State or Territory. Proposed subsection 9A(1) ensures that any functions acquired in this way are in accordance with either an agreement between the Commonwealth and the State or Territory, that has been approved by the Minister, or the Minister has separately agreed to the conferral.
4.4 Proposed subsection 9(c) expands APRA's functions by allowing it to enter into an agreement (subject to proposed subsection 9A(2)) to provide prudential regulation or advice services.
4.5 Proposed subsection 9A(2) sets out the conditions under which APRA can enter into an agreement with a State, Territory or other person to provide prudential regulation or advice services: namely the approval of the Minister, the charging of a fee and that the service provided is within the Commonwealth's legislative power. Proposed subsection 9A(3) indicates that the agreement may also set out the liability of each party in respect of the agreement.
4.6 Proposed subsection 9A(4) permits the Minister to delegate the approval of agreements under proposed subsection 9A(2) to a Senior Executive Service Office in the Department.
4.7 This item will exclude provision of prudential regulation or advice services under agreements from the possibility of being the subject to additional fixed charges that APRA may impose in respect of its services, facilities, etc under subsection 51(1).
4.8 This item ensures the proposed Financial Sector (Transfers of Business) Act 1999 is included in the list of the Acts in the secrecy provisions.
4.9 These items improve the readability of the APRA Act.
4.10 This item will ensure the consistency between section 57 and proposed section 58 in regard to the list of persons who may not disclose documents or information (except in particular circumstances) and the list of persons who may be provided immunity.
4.11 This item corrects an omission to ensure that it is not an offence to provide another person access to documents, as well as information, provided it is done by the direction or authority of APRA, under compulsion or obligation of law, or another person's direction if the information relates to the other person.
4.12 This item ensures that APRA's protection from liability relates more closely to its functions (proposed section 9). This item will also indemnify APRA, a Board member, an APRA staff member, an agent of APRA, a Board member or an APRA staff member; cover anything done, or omitted to be done, in the exercise or performance, or the purported exercise or performance, of powers, functions or duties conferred or imposed on APRA; and ensure that protection from liability does not apply to an act or omission in bad faith.