The Australian Prudential Regulation Authority (APRA) today released the final reporting requirements for the collection of data from discretionary mutual funds (DMFs). This follows the passage of the Financial Sector Legislation Amendment (Discretionary Mutual Funds and Direct Offshore Foreign Insurers) Act 2007 on 13 September 2007. This Act requires DMFs to provide data to APRA under the Financial Sector (Collection of Data) Act 2001 to assist the Government to assess the need to prudentially regulate DMFs. APRA believes that the proposed level of reporting will address this need.

DMFs are entities that offer ‘discretionary cover’, that is, an insurance-like product that may involve an obligation on the DMF to consider meeting a claim made on it, but gives the DMF a discretion as to whether it will pay the claim. A DMF may be a trust, mutual, company limited by guarantee or other structure. Because of their discretionary nature DMFs are not insurance companies and therefore are not required to be authorised by APRA.

APRA Member John Trowbridge said: “DMFs will be subject to a compulsory data collection. APRA has developed reporting proposals which are designed to enable their operations and financial structure to be better understood.”

APRA’s reporting requirements are set out in the reporting standards, forms and instructions. APRA has established a specialist unit who can assist DMFs with any questions on the final forms and reporting requirements.

The letter, forms and instructions are located on the APRA website at: http://www.apra.gov.au/RFC/DMFs.cfm.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $3 trillion in assets for 21 million Australian depositors, policyholders and superannuation fund members.

Media and industry inquiries only:
Stuart Snell, Head of Public Affairs
Australian Prudential Regulation Authority
Telephone: 02 9210 3384
Mobile: 0407 250 276

All other inquiries:
APRA Contact Centre 1300 131 060.