Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 (10 of 2018)

Schedule 1   Amendment of the Banking Act 1959

Part 1   Main amendments

Banking Act 1959

218   At the end of Subdivision C of Division 2AA of Part II

Add:

16AIA APRA may make transferred liabilities determination where transfer of business

(1) APRA may make a determination (a transferred liabilities determination ) if:

(a) an ADI is a declared ADI as a result of the Minister having made a declaration under section 16AD; and

(b) APRA has made, or proposes to make, a determination under section 25 (compulsory transfer determination) of the Financial Sector (Transfer and Restructure) Act 1999 that there is to be a total transfer or partial transfer of business from the declared ADI to a receiving body (within the meaning of that Act); and

(c) the transfer of business will transfer:

(i) the liabilities of the declared ADI in respect of every protected account kept by an account-holder with the ADI; or

(ii) the liabilities of the declared ADI in respect of every protected account kept by an account-holder with the ADI, to the extent of the amount to which each of those account-holders is entitled under this Subdivision in relation to those protected accounts; and

(d) APRA is satisfied that it will be able to identify those protected accounts; and

(e) APRA has worked out:

(i) APRA's reasonable estimate of the total amount (the FCS amount ) to which account-holders of those protected accounts will be entitled (disregarding the determination) under section 16AF as a result of the Minister's declaration mentioned in paragraph (a); and

(ii) APRA's reasonable estimate of the total amount (the administration amount ) of the costs that would be incurred by APRA in relation to the exercise of its powers and the performance of its functions under this Division relating to the declared ADI if it did not make the determination; and

(f) APRA has worked out a total payment amount in accordance with section 16AIB; and

(g) APRA considers that it is reasonable in the circumstances to make the determination.

(2) However, APRA cannot make the determination if APRA has already issued a certificate of transfer under section 33 of the Financial Sector (Transfer and Restructure) Act 1999 stating that the transfer is to take effect.

(3) The determination must be in writing.

(4) The determination must specify the following:

(a) the declared ADI;

(b) the receiving body;

(c) a description, in general or detailed terms, of all the protected accounts kept with the declared ADI;

(d) the FCS amount;

(e) the administration amount;

(f) the total payment amount;

(g) the FCS payment amount;

(h) the administration payment amount;

(i) any other information that APRA considers appropriate.

(5) A determination under subsection (1) may be varied, but not revoked, in accordance with subsection 33(3) of the Acts Interpretation Act 1901.

(6) A determination made under subsection (1) is not a legislative instrument.

16AIB Payment amounts under transferred liabilities determination

(1) For the purposes of paragraph 16AIA(1)(f), APRA may work out:

(a) an amount (the FCS payment amount ) that:

(i) is equal to or less than the FCS amount; and

(ii) APRA considers to be appropriate; and

(b) an amount (the administration payment amount ) that:

(i) is equal to or less than the administration amount; and

(ii) APRA considers to be appropriate; and

(c) the amount (the total payment amount ) that is the sum of the FCS payment amount and the administration payment amount.

(2) In working out the FCS payment amount and the administration payment amount, APRA must have regard to the following:

(a) the totalvalue of the assets that will be transferred from the declared ADI to the receiving body in accordance with the transfer of business;

(b) the totalvalue of the liabilities that will be transferred from the declared ADI to the receiving body in accordance with the transfer of business;

(c) any other matter that APRA considers appropriate.

(3) The FCS payment amount or the administration payment amount may be a nil amount.

16AIC Consequences of transferred liabilities determination once certificate of transfer issued

Application of section

(1) This section applies if:

(a) APRA has made a transferred liabilities determination; and

(b) APRA has issued a certificate of transfer under section 33 of the Financial Sector (Transfer and Restructure) Act 1999 stating that the transfer is to take effect.

Receiving body entitled to total payment amount

(2) The receiving body is entitled to be paid by APRA an amount equal to the total payment amount specified in the determination.

Reduction of rights and entitlements of account-holder

(3) An account-holder's entitlement under this Subdivision to be paid an amount in respect of a protected account kept with the declared ADI is reduced to nil.

Declared ADI liable to APRA for total payment amount

(4) The declared ADI is liable to pay to APRA an amount equal to the sum of the total payment amount specified in the determination.

(5) That liability is due and payable to APRA when the certificate of transfer comes into force.

(6) Despite paragraph 16AI(1)(b), APRA does not have the right mentioned in that paragraph.