Conversion for AFIC Standards to APRA Transitional Prudential Standards

The table below outlines the status of the AFIC Prudential Standards for building societies, credit unions and SSPs under the Commonwealths regulatory regime administered by APRA and ASIC. Where Standards have been retained, they are transitional standards in terms of the Financial Sector Reform (Amendment and Transitional Provisions) Regulations 1999.

This table is current.

AFIC STANDARD

Details Of Conversion

(see also notes at end of table)

BOOK 1: PRUDENTIAL SUPERVISION OF STATE-BASED FINANCIAL INSTITUTIONS

Deleted¹

BOOK 2: PRUDENTIAL SUPERVISION OF STATE-BASED FINANCIAL INSTITUTIONS BY STATE SUPERVISORY AUTHORITIES

Deleted¹

BOOK 3: PRUDENTIAL STANDARDS FOR BUILDING SOCIETIES
Prudential Supervision of Building Societies Introduction Character Transitional Arrangements Meeting the New Prudential Standards Adjustment to the New Supervisory Environment	Deleted¹
Prudential Note 3.1 (Building Societies) - Risk Management Objective General Background Specific Risks Prudential Standards 3.1.1 Prime Liquid Assets Requirement 3.1.2 Operational Liquidity 3.1.3 Managing Market Risk 3.1.4 Managing Credit Risk and Large Exposures 3.1.5 Data Risk 3.1.6 Operations Risk	Retained
Prudential Note 3.2 (Building Societies) - Capital Adequacy Objective General Background Framework Prudential Standards 3.2.1 Capital Adequacy 3.2.2 Definition of Capital 3.2.3 Hybrid (Debt/Equity) Capital Instruments 3.2.4 Categories of Risk 3.2.5 Off-Balance Sheet Business 3.2.6 Derivative Products Deductions of Certain Investments from Capital Reductions in Capital	Retained
Prudential Note 3.3 (Building Societies) - Accounting and Disclosure
A. Public Financial Reports	Deleted²
B. Financial Reports to State Supervisory Authorities	Retained
C. Audit	Retained
Prudential Standards - Public Reporting
3.3.1 AASB Accounting Standards	Deleted³
3.3.2 Accounting Standards Specific to Building Societies	3.3.2.a and 3.3.2.b retained Remainder deleted³
3.3.3 Reporting to Members and to the Public	Deleted
3.3.4 Reporting to the State Supervisory Authorities	Deleted
3.3.5 Required Returns	3.3.5.a(ii) deleted¹ Remainder retained
3.3.6 Audit Standards	Retained
Prudential Note 3.4 (Building Societies) - Other Issues
A. Subsidiaries 3.4.1 Subsidiaries	Retained
B. Ownership and Control 3.4.2 Concentration of Ownership	Deleted⁴
C. Guarantees 3.4.3 Granting of Guarantees by a Society D. (Deleted) E. Service Contracts 3.4.5 Review of Service Contracts	Retained
F. Emergency Liquidity Support Scheme 3.4.6 Commitment to Emergency Liquidity Support Mechanism 3.4.7 Contractual Provision of Emergency Liquidity Support	Deleted⁵
G. Deposits and Other Funding from Non-Members 3.4.8 Deposits and Other Funding from Non-Members	Deleted¹
Prudential Note 3.5 (Building Societies) -Capital Raising and Demutualisation Objective General Background Prudential Standards 3.5.1 Reserves and Control 3.5.2 New Issues and Demutualisation 3.5.3 Issues to Directors and Associates 3.5.4 Exempt Stock Markets 3.5.5 Interpretation	Deleted⁶
Prudential Note 3.6 (Building Societies) -Securitisation Objective General Background Prudential Standards 3.6.1 Disclosure 3.6.2 Separation: Structuring Securitisation Schemes 3.6.3 Servicing 3.6.4 Representations and Warranties 3.6.5 Supply of Assets: Clean Sale 3.6.6 Spread Accounts and Like Arrangements 3.6.7 Purchase of Securities	Retained
Prudential Note 3.7 (Building Societies) - Funds Management and Other Marketing Activities Objective General Background Prudential Standards 3.7.1 Disclosure 3.7.2 Structuring Funds Management Schemes 3.7.3 Managing 3.7.4 Offering Investment Advice and Sale of Securities 3.7.5 Badging 3.7.6 Purchase of Securities 3.7.7 Transitional Provisions	Retained⁷

BOOK 4: PRUDENTIAL SUPERVISION OF CREDIT UNIONS
Introduction Character Transitional Arrangements Meeting the New Prudential Standards Adjustment to the New Supervisory Environment	Deleted¹
Prudential Note 4.1 (Credit Unions) - Risk Management Objective General Background Specific Risks Prudential Standards 4.1.1 Prime Liquid Assets Requirement 4.1.2 Operational Liquidity 4.1.3 Managing Market Risk 4.1.4 Managing Credit Risk and Large Exposures 4.1.5 Data Risk 4.1.6 Operations Risk	Retained
Prudential Note 4.2 (Credit Unions) - Capital Adequacy Objective General Background Framework Prudential Standards 4.2.1 Capital Adequacy 4.2.2 Definition of Capital 4.2.3 Hybrid (Debt/Equity) Capital Instruments 4.2.4 Categories of Risk 4.2.5 Off-Balance Sheet Business 4.2.6 Derivative Products 4.2.7 Deductions of Certain Investments from Capital 4.2.8 Reductions in Capital	Retained
Prudential Note 4.3 (Credit Unions) Accounting and Disclosure
A. Public Financial Reports	Deleted²
B. Financial Reports to State Supervisory Authorities	Retained
C. Audit	Retained
Prudential Standards - Public Reporting
4.3.1 AASB Accounting Standards	Deleted³
4.3.2 Accounting Standards Specific to Credit Unions	4.3.2.a and 4.3.2.b retained Remainder deleted³
4.3.3 Reporting to Members and to the Public	Deleted³
4.3.4 Reporting to the State Supervisory Authorities	Deleted¹
4.3.5 Required Returns	4.3.5.a(ii) deleted¹ Remainder retained
4.3.6 Audit Standards	Retained
Prudential Note 4.4 (Credit Unions) - Other Issues
A. Subsidiaries 4.4.1 Subsidiaries B. Guarantees 4.4.2 Granting of Guarantees by a Credit Union	Retained
C. (Deleted)
D. Service Contracts 4.4.4 Review of Service Contracts	Retained
E. Emergency Liquidity Support Scheme 4.4.5 Commitment to Emergency Liquidity Support Mechanism 4.4.6 Contractual Provision of Emergency Liquidity Support F. Deposits and Other Funding from Non-Members 4.4.7 Deposits and Other Funding from Non-Members	Deleted⁴
F. Deposits and Other Funding from Non-Members 4.4.8 Deposits and Other Funding from Non-Member	Deleted¹
Prudential Note 4.5 Demutualisation (Credit Unions) Prudential Standards Restructuring Involving Demutualisation Conversions, Mergers and Transfers Convertible Securities Interpretation	Deleted⁸
Prudential Note 4.6 (Credit Unions) - Securitisation Objective General Background Prudential Standards 4.6.1 Disclosure 4.6.2 Separation: Structuring Securitisation Schemes 4.6.3 Servicing 4.6.4 Representations and Warranties 4.6.5 Supply of Assets: Clean Sale 4.6.6 Spread Accounts and Like Arrangements 4.6.7 Purchase of Securities	Retained
Prudential Note 4.7 (Credit Unions) - Funds Management and Other Marketing Activities Objective General Background Prudential Standards 4.7.1 Disclosure 4.7.2 Structuring Funds Management Schemes 4.7.3 Managing 4.7.4 Offering Investment Advice and Sale of Securities 4.7.5 Badging 4.7.6 Purchase of Securities 4.7.7 Transitional Provisions	Retained⁷
Prudential Note 4.8 (Credit Unions) - Mutuality Objective General Background Prudential Standards 4.8.1 New Issues Procedure 4.8.2 Mutuality 4.8.3 Exempt Stock Markets and Subsequent Offers 4.8.4 Interpretation	Deleted⁹

BOOK 5: PRUDENTIAL SUPERVISION OF SPECIAL SERVICES PROVIDERS

Introduction
Treasury Management
Settlement Services
Other Services
Involvement of SSPs in the Emergency Liquidity Support Scheme
Registration as a Special Services Provider

Deleted¹

Prudential Note 5.1 (Special Services Providers) - Risk Management
Objective
General Background
Role of the Board of Directors and Senior Management
Specific Risks
Prudential Standards

5.1 Risk Management
5.1.1 Liquidity Risk
5.1.2 Managing Market Risk
5.1.3 Credit and Settlement Risk
5.1.4 Transaction and Technology Risk
5.1.5 Operations Risk

Retained

Prudential Note 5.2 (Special Services Providers) - Capital Adequacy
Objective
General Background
Capital Adequacy Requirements
Prudential Standards

5.2.1 Capital Adequacy
5.2.2 Definition of Capital
5.2.3 Hybrid (Debt/Equity) Capital Instruments
5.2.4 Categories of Risk
5.2.5 Off-Balance Sheet Business
5.2.6 Derivative Products
5.2.7 Deductions of Certain Investments from Capital
5.2.8 Reductions in Capital
5.2.9 Market Risk

Retained

Prudential Note 5.3 (Special Services Providers) Accounting and Disclosure

A. Public Financial Reports

Deleted²

B. Financial Reports to AFIC

Retained

C. Audit

Retained

5.3.1 AASB Accounting Standards
5.3.2 Accounting Standards Specific to SSPs
5.3.3 Reporting to Owners

Deleted³

5.3.4 Reporting to AFIC

Deleted¹

5.3.5 Prescribed Returns

5.3.5.a(iii) deleted²

Remainder retained

5.3.6 Audit Standards

Retained

Prudential Note 5.4 (Special Services Providers) - Other Issues

A. Size
5.4.1 Size of SSPs

Retained

B. Ownership and Control
5.4.2 Concentration of Ownership

Deleted⁵

C. Directors
5.4.3 Composition of the Boards of Directors of SSPs

Retained

D. Standby Credit Facilities
5.4.4 Standby Credit Facilities of SSPs
E. Subsidiaries
5.4.5 Subsidiaries
F. Guarantees
5.4.6 Granting of Guarantees by SSPs

Retained

G. (Deleted)

H. Service Contracts
5.4.8 Review of Service Contracts

Retained

I. Emergency Liquidity Support Scheme
5.4.9 Rights and Responsibilities Under the Emergency Liquidity Support Mechanism

Deleted⁴

Prudential Note 5.5 (Special Services Providers) - Securitisation, Funds Management and Other Marketing Activities
Objective
General Background
Prudential Standard

5.5.1 Disclosure
5.5.2 Structuring Funds Management and Securitisation Schemes
5.5.3 Offering Investment Advice and Sale of Securities
5.5.4 Badging
5.5.5 Purchase of Securities
5.5.6 Servicing
5.5.7 Managing Investors Funds
5.5.8 Representations and Warranties

Retained⁷

Attachment B to the Prudential Standards

Quarterly Return Requirements

Retained

Notes

1

These sections have been deleted as their purpose became redundant in the move to the Commonwealth.

2

Public reporting issues are now regulated under Corporations Law and Australian Accounting Standards.

3

Australian Accounting Standards now apply under Corporations Law. The paragraphs in 3.3.1 and 4.3.1 under the heading "AASB 1032 Specific Disclosures by Financial Institutions" are retained, except for the definition of deposit, as ASIC transitional standards.

4

Emergency liquidity support arrangements have been replaced by APRA-certified industry support contracts, under the Banking Act, and the liquidity arrangements of individual ADIs.

5

The section on ownership and control that relates to concentration of ownership has been replaced by the Financial Sector (Shareholdings) Act.

6

Prudential Standards 3.5.4 and 3.5.5 (on Exempt Stock Markets and Interpretation) are retained as ASIC transitional standards.

7

Prudential Standards 3.7.1, 3.7.4, 3.7.5, 4.7.1, 4.7.4, 5.5.1, 5.5.3 and 5.5.4 which relate to disclosure and investment advice for funds management and other marketing activities are retained as APRA and ASIC transitional standards.

8

Demutualisation is covered by new provisions in the Corporations Law.

9

There is a requirement in the consent granted by APRA under section 66 of the Banking Act that credit unions be mutually owned.

Australian Prudential Regulation Authority
1 July 1999