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APRA releases proposed amendments to prudential standard for Financial Claims Scheme

Wednesday 7 November 2012

 

​​​The Australian Prudential Regulation Authority (APRA) has today released a consultation package on the Financial Claims Scheme (FCS) as it applies to locally incorporated authorised deposit-taking institutions (ADIs).

The package comprises a discussion paper, information paper and draft amended Prudential Standard APS 910 Financial Claims Scheme (APS 910). The proposals in the package require ADIs to be operationally ready to meet payment, reporting and communications requirements should they be declared by the Minister to be subject to the FCS.

Established in October 2008, the FCS is designed to protect depositors up to a defined amount of $250,000 per account-holder per ADI, and provide them with timely access to their deposits in the event that their ADI becomes insolvent and is declared to be subject to the FCS.

APRA is proposing amendments to APS 910 that will facilitate the timely and accurate payment of account-holders in the event of the declaration of an ADI under the FCS.

The additional FCS requirements in the package released today relate to:

  • the payment of FCS balances;
  • generation of reports to APRA, the Australian Taxation Office and account-holders;
  • communication with stakeholders;
  • regular testing of each ADI’s FCS capacity;
  • external auditor reviews of some APS 910 requirements; and
  • attestation by the ADI’s chief executive officer regarding compliance with APS 910.

APRA will consult on the consultation package for eight weeks, with submissions due by 31 December 2012.

APRA intends to finalise the amended APS 910 by the middle of next year and bring it into effect from 1 July 2013. It is proposed that all ADIs will be given 12 months to comply with the new FCS requirements, with a deadline of 1 July 2014.

The commencement date for existing FCS requirements relating to the Single Customer View remains 1 January 2014. An extended transition period for these existing requirements can be granted by APRA on application by ADIs, with the latest commencement date being 1 January 2016.

The package released today 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.