Banking Act 1959

Part II - Provisions relating to the carrying on of banking business  

Division 2A - Auditors of ADIs and authorised NOHCs and their subsidiaries  

SECTION 16BA   Requirements for auditors to give information about ADIs  

Persons to whom requirements apply

(1)  
This section applies to a person who is or has been an auditor of a body corporate that is:


(a) an ADI; or


(b) an authorised NOHC; or


(c) a subsidiary of an ADI or an authorised NOHC; or


(d) if an ADI is a subsidiary of a foreign corporation (whether or not the ADI is itself a foreign ADI):


(i) another subsidiary (a relevant Australian-incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is incorporated in Australia; or

(ii) another subsidiary (a relevant foreign-incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is not incorporated in Australia and carries on business in Australia.
Matters requiring immediate notice

(2)  
If the person has reasonable grounds for believing that:


(a) the body corporate is insolvent or there is a significant risk that the body corporate will become insolvent; or


(b) an existing or proposed state of affairs may materially prejudice the interests of:


(i) if the body corporate is an ADI or a subsidiary of an ADI - the depositors of the ADI; or

(ii) if the body corporate is an authorised NOHC or a subsidiary of an authorised NOHC - the depositors of any ADI that is a subsidiary of the authorised NOHC; or

(iii) if the body corporate is a relevant Australian-incorporated subsidiary or a relevant foreign-incorporated subsidiary of a foreign corporation - the depositors of any ADI that is a subsidiary of the foreign corporation;
the person must immediately notify APRA in writing of the matter. Offences in relation to matters requiring immediate notice

(3)  
A person commits an offence if the person contravenes subsection (2).

Penalty: Imprisonment for 6 months.

(4)  
A person commits an offence if the person contravenes subsection (2). This is an offence of strict liability.

Penalty: 60 penalty units.

Note:

For strict liability , see section 6.1 of the Criminal Code .

Defence if matter already notified

(5)  
Subsections (3) and (4) do not apply to a person in relation to a matter referred to in subsection (2) if:


(a) the person becomes aware of the matter because the person is informed of it by a director or senior manager of the body corporate; and


(b) the director or senior manager informs the person that the body corporate has notified APRA in writing of the matter; and


(c) the person has no reason to disbelieve the director or senior manager.

Matters requiring notice as soon as practicable

(6)  
If the person has reasonable grounds for believing that:


(a) the body corporate has failed or will fail to comply with:


(i) a provision of this Act, the regulations or the Financial Sector (Collection of Data) Act 2001 ; or

(ii) if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC, - a prudential standard; or

(iii) if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC, - a direction under Division 1BA of Part II or section 29 ; or

(iv) if the body corporate is an ADI - a condition of the body corporate ' s section 9 authority; or

(v) if the body corporate is an authorised NOHC - a condition of the body corporate ' s NOHC authority; and


(b) the failure to comply is or will be significant (see subsection (7)); the person must give APRA a written report about the failure as soon as practicable, and in any event no later than 10 business days.

(7)  
For the purposes of paragraph (6)(b), a failure to comply is or will be significant if the failure is or will be significant having regard to any one or more of the following:


(a) the number or frequency of similar failures;


(b) the impact the failure has or will have on the body corporate ' s ability to conduct its business;


(c) the extent to which the failure indicates that the body corporate ' s arrangements to ensure compliance with this Act, the prudential standards or the regulations might be inadequate;


(d) the actual or potential financial loss arising or that will arise from the failure:


(i) if the body corporate is an ADI - to the depositors of the body corporate; or

(ii) to the body corporate;


(e) any matters prescribed by the regulations for the purposes of this paragraph. Offences in relation to matters requiring notice as soon as practicable

(8)  
A person commits an offence if the person contravenes subsection (6).

Penalty: Imprisonment for 6 months.

(9)  
A person commits an offence if the person contravenes subsection (6). This is an offence of strict liability.

Penalty: 60 penalty units.

Note:

For strict liability , see section 6.1 of the Criminal Code .

Defence if failure already notified

(10)  
Subsections (8) and (9) do not apply to a person in relation to a failure to comply referred to in subsection (6) if:


(a) a director or senior manager of the body corporate informs the person that the body corporate has informed APRA in writing of the failure; and


(b) the person has no reason to disbelieve the director or senior manager.

Note:

The defendant bears an evidential burden in relation to the matters in subsection (10). See subsection 13.3(3) of the Criminal Code .

Offence in relation to subsections (5) and (10)

(11)  
A person commits an offence if:


(a) the person is a director or senior manager of a body corporate referred to in subsection (1); and


(b) the person knows that there are reasonable grounds for believing a thing referred to in subsection (2) or (6); and


(c) the person informs an auditor of the body corporate that the body corporate has informed APRA in writing of the thing; and


(d) the body corporate has not done so.

Penalty: Imprisonment for 12 months.




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