The Australian Prudential Regulation Authority (APRA) has begun a consultation on draft rules that give clarity to owners of new entrant financial sector companies on whether they are likely to be approved under the Financial Sector (Shareholdings) Act 1998 (FSSA).
The FSSA was amended by Parliament in 2018 to introduce a new streamlined “fit and proper” test for shareholders of new or recently established authorised deposit-taking institutions and life insurers with assets below $200 million, and general insurers with assets below $50 million.
The Financial Sector (Shareholdings) Rules 2019
(the Rules) prescribe matters in regards to the recent changes to the FSSA. In particular, APRA has proposed Rules setting out the matters that must be considered in determining if a person is “fit and proper” for the purposes of the FSSA; the calculation used to determine if an entity’s assets are within the relevant threshold; and the information to be reported to APRA annually if an application under the “fit and proper” test is approved.
An eight-week consultation period on the proposed Rules has now commenced, with APRA accepting submissions until 27 May 2019.
Copies of the draft Rules and explanatory material are available at: https://www.apra.gov.au/financial-sector-shareholdings-rules-2019.