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APRA consults on implementation of Financial Claims Scheme

Wednesday 6 January 2010

 

The Australian Prudential Regulation Authority (APRA) has today released for consultation a discussion paper detailing proposals on the implementation of the Financial Claims Scheme (FCS) for authorised deposit-taking institutions (ADIs).

The FCS was established in October 2008 and is designed to provide depositors with timely access to their deposits, up to a defined amount, in the event that their ADI becomes insolvent.

APRA’s discussion paper sets out proposals to ensure that, in the event of failure, ADIs are able to provide reliable data in the required format to enable depositors to be paid in a timely manner. These proposals include details on:

  • how end-of-day account balances are to be calculated for FCS purposes;
  • aggregation of accounts to ensure that each account-holder is able to be identified for the purpose of making payment;
  • proposed information collection for FCS purposes; and
  • potential payout options.

APRA Chairman Dr John Laker said it is important that the implementation of the FCS is efficient and cost-effective. ‘It will be necessary to balance depositors’ timely access to their funds and the stability of the financial system, against the cost of the Scheme’s implementation, both for ADIs and for APRA.’

Subject to industry feedback, APRA will release a draft reporting standard later in 2010 that sets out further detail on proposed information collection requirements. Once the requirements are finalised, there will be a transition period to allow industry time to make changes to their information technology systems for FCS purposes.

Submissions on the discussion paper are due by 12 March 2010.

The consultation package can be found on the APRA website. 

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, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6 trillion in assets for Australian depositors, policyholders and superannuation fund members.