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Determinations/Financial (Other) as made
This instrument revokes the Financial Sector (Collection of Data) (reporting standard) determination No. 23 of 2008 and determines a new Reporting Standard ARS 222.0 Exposures to Related Entities.
Administered by: Treasury
Registered 23 Mar 2018
Tabling HistoryDate
Tabled HR26-Mar-2018
Tabled Senate27-Mar-2018

Financial Sector (Collection of Data) (reporting standard) determination No. 12 of 2018

Reporting Standard ARS 222.0 Exposures to Related Entities

Financial Sector (Collection of Data) Act 2001

 

I, Alison Bliss, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:

 

(a)    REVOKE Financial Sector (Collection of Data) (reporting standard) determination No. 23 of 2008, including Reporting Standard ARS 222.0 Exposures to Related Entities made under that Determination; and

 

(b)   DETERMINE Reporting Standard ARS 222.0 Exposures to Related Entities, in the form set out in the Schedule, which applies to the financial sector entities to the extent provided in paragraph 3 of the reporting standard.

 

Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on 1 April 2018.

 

This instrument commences on 1 April 2018.

 

Dated: 21 March 2018

 

[Signed]

 

 

Alison Bliss

General Manager

Data Analytics Division

 

 

 

Interpretation

In this Determination:

APRA means the Australian Prudential Regulation Authority.

financial sector entity has the meaning given by section 5 of the Act.

 

 

Schedule

 

Reporting Standard ARS 222.0 Exposures to Related Entities comprises the document commencing on the following page.


Reporting Standard ARS 222.0

Exposures to Related Entities

Objective of this Reporting Standard

This Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 and outlines the overall requirements for the provision of information to APRA relating to an authorised deposit-taking institution’s exposures to related entities. It should be read in conjunction with Reporting Form ARF 222.0 Exposures to Related Entities designated for a ‘Licensed ADI/Extended Licensed Entity (ELE)’ and the associated instructions (each of which is attached and forms part of this Reporting Standard).

Authority

1.             This Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001.

Purpose

2.             Data collected in Reporting Form ARF 222.0 Exposures to Related Entities (ARF 222.0) is used by APRA for the purpose of prudential supervision. It may also be used by the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS).

Application and commencement

3.             This Reporting Standard applies to all authorised deposit-taking institutions (ADIs).

4.             This Reporting Standard commences on 1 April 2018.

Information required

5.             A branch of a foreign ADI must complete and provide to APRA, Part C of ARF 222.0 designated for a ‘Licensed ADI/ELE’, for each reporting period.

6.             All other ADIs must complete and provide to APRA Parts A and B of ARF 222.0 designated for a ‘Licensed ADI/ELE’ for each reporting period.

Form and method of submission

7.             The information required by this Reporting Standard must be given to APRA in electronic format, using the ‘Direct to APRA’ application or by a method notified by APRA, in writing, prior to submission.

Note: the Direct to APRA application software (also known as D2A) may be obtained from APRA.

Reporting periods and due dates

8.             Subject to paragraph 9, an ADI to which this Reporting Standard applies must provide the information required by this Reporting Standard for each quarter based on the financial year (within the meaning of the Corporations Act 2001) of the ADI.

9.             APRA may, by notice in writing, change the reporting periods, or specified reporting periods, for a particular ADI, to require it to provide the information required by this Reporting Standard more frequently, or less frequently, having regard to:

(a)           the particular circumstances of the ADI;

(b)          the extent to which the information is required for the purposes of the prudential supervision of the ADI; and

(c)           the requirements of the RBA or the ABS.

10.         The information required by this Reporting Standard must be provided to APRA in accordance with the table below. The right hand column of the table sets out the number of business days after the end of the reporting period to which the information relates within which information must be submitted to APRA by an ADI in the classes set out in the left hand column.

Class of ADI

Number of business days

Australian-owned Bank

20

Foreign Subsidiary Bank

20

Branch of a Foreign Bank

20

Building Society

15

Credit Union[1]

15

Other ADI

15

 

11.         APRA may grant an ADI an extension of a due date in writing, in which case the new due date for the provision of the information will be the date on the notice of extension.

Quality control

12.         All information provided by an ADI under this Reporting Standard must be the product of systems, processes and controls that have been reviewed and tested by the external auditor of the ADI as set out in Prudential Standard APS 310 Audit and Related Matters. Relevant standards and guidance statements issued by the Auditing and Assurance Standards Board provide information on the scope and nature of the review and testing required from external auditors. This review and testing must be done on an annual basis or more frequently if required by the external auditor to enable the external auditor to form an opinion on the accuracy and reliability of the information provided by an ADI under this Reporting Standard.

13.         All information provided by an ADI under this Reporting Standard must be subject to processes and controls developed by the ADI for the internal review and authorisation of that information. These systems, processes and controls are to assure the completeness and reliability of the information provided.

Authorisation

14.         When an officer of an ADI submits information under this Reporting Standard using the D2A application, or other method notified by APRA, it will be necessary for the officer to digitally sign the relevant information using a digital certificate acceptable to APRA.

Minor alterations to forms and instructions

15.         APRA may make minor variations to:

(a)           a form that is part of this Reporting Standard, and the instructions to such a form, to correct technical, programming or logical errors, inconsistencies or anomalies; or

(b)          the instructions to a form, to clarify their application to the form

without changing any substantive requirement in the form or instructions.

16.         If APRA makes such a variation it must notify in writing each ADI that is required to report under this Reporting Standard.

Interpretation

17.         In this Reporting Standard:

AASB has the meaning in section 9 of the Corporations Act 2001.

AASB 127 means Australian accounting standard AASB 127 Consolidated and Separate Financial Statements made by the Australian Accounting Standards Board.

ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959.

APRA means the Australian Prudential Regulation Authority established under the Australian Prudential Regulation Authority Act 1998.

Australian-owned bank means a locally incorporated ADI that assumes or uses the word ‘bank’ in relation to its banking business and is not a foreign subsidiary bank.

branch of a foreign bank means a ‘foreign ADI’ as defined in section 5 of the Banking Act 1959.

building society means a locally incorporated ADI that assumes or uses the expression ‘building society’ in relation to its banking business.

business days means ordinary business days, exclusive of Saturdays, Sundays and public holidays.

class of ADI means each of the following:

(i)                 Australian-owned bank;

(ii)               foreign subsidiary bank;

(iii)             branch of a foreign bank;

(iv)             building society;

(v)               credit union; and

(vi)             other ADI.

consolidated ADI group means a group comprising:

(a)           an ADI that is a highest parent entity; and

(b)          each subsidiary (within the meaning of AASB 127) of that ADI, whether the subsidiary is locally-incorporated or not, other than a subsidiary that is excluded by the instructions attached to this standard.

credit union means a locally incorporated ADI that assumes or uses the expression ‘credit union’ in relation to its banking business and includes Cairns Penny Savings & Loans Limited.

due date means the relevant due date under paragraph 10 or, if applicable, paragraph 11.

Extended Licensed Entity (ELE) means, in relation to a locally-incorporated ADI, the ADI and each subsidiary of the ADI specified in the approval, given by APRA, on a consolidated basis in accordance with Prudential Standard APS 110 Capital Adequacy. The ELE forms a single entity for reporting purposes.

foreign ADI has the meaning in section 5 of the Banking Act 1959.

foreign subsidiary bank means a locally incorporated ADI in which a bank that is not locally incorporated has a stake of more than 15 per cent.

highest parent entity means an ADI that satisfies all of the following conditions:

(a)           it is locally-incorporated;

(b)          it has at least one subsidiary (within the meaning of AASB 127); and

(c)           it is not itself a subsidiary (within the meaning of AASB 127) of an ADI that is locally-incorporated.

locally incorporated means incorporated in Australia or in a State or Territory of Australia, by or under a Commonwealth, State or territory law.

other ADI means an ADI that is not an Australian-owned bank, a branch of a foreign bank, a building society, a credit union or a foreign subsidiary bank but does not include Cairns Penny Savings & Loans Limited.

reporting period means a period mentioned in paragraph 8 or, if applicable, paragraph 9.

stake means a stake determined under the Financial Sector (Shareholdings) Act 1998, as if the only associates that were taken into account under paragraph (b) of subclause 10(1) of the Schedule to that Act were those set out in paragraphs (h), (j) and (l) of subclause 4(1).

18.         Unless the contrary intention appears, a reference to an Act, Prudential Standard, Reporting Standard, Australian Accounting or Auditing Standard is a reference to the instrument as in force from time to time.

 

 






Reporting Form ARF 222.0

Exposures to Related Entities

Instruction Guide

Purpose

This form collects information on an authorised deposit-taking institution’s (ADI’s) exposures to individual counterparties that are related to the ADI.

Information reported on this form is prudentially important, as it will form part of APRA’s monitoring and analysis framework for the ADI and the industry.

Audit requirements

This form is subject to audit review and testing.  The scope and nature of audit testing required is outlined in the applicable Audit Guidance Statement issued by the Auditing and Assurance Board of the Australian Accounting Research Foundation.

Reporting entity

This form is to be completed as follows:

·                branches of foreign banks are only required to complete Part C of this form for the Australian branch (i.e. Parts A and B of this form are not applicable); and

·                all other ADIs to which this Reporting Standard applies are required to complete Parts A and B of this form.

Unit of measurement

Australian-owned banks, foreign subsidiary banks and branches of foreign banks are asked to complete the form in millions of Australian dollars rounded to one decimal place, and for other non-bank ADIs in whole Australian dollars (no decimal place).

Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).

The general requirements of AASB 121 for translation are:

1.             foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[2]

2.             foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction;[3]

3.             foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.

Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement (AASB 139).  However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.

For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.

As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.

Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.

The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss; and

4.             translation of financial reports of foreign operations.

A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.

·                Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.

·                Translation of financial reports should otherwise follow the requirements in AASB 121.

Reporting period and timeframes for lodgement

The form is to be completed as at the last day of the stated reporting quarter.  Australian-owned banks, foreign subsidiary banks, branches of foreign banks and other ADIs should submit the completed form to APRA within 20 business days after the end of the relevant reporting quarter.  Credit Unions, Cairns Penny Savings & Loans Limited and Building Societies should submit the completed form to APRA within 15 business days after the end of the relevant reporting quarter.

Basis of preparation

For the purposes of this form, unless specifically advised in the ‘Instruction Guide for Specific Items’, ADIs are to report all exposures gross.  No netting is to be recognised even if the ADI has in place netting agreements that are in the form of a legally recognised right to net or set off items of assets and liabilities in accordance with AASB 139, AASB 132 Financial Instruments: Disclosure and Presentation and AASB 7 Financial Instruments: Disclosures.

Definitions

This section provides guidance on the interpretation of certain items used in this form.

Licensed ADI

This refers to the operations of the reporting ADI on a stand-alone basis.

Securitisation deconsolidation principle

Except as otherwise specified in these instructions, the following applies:

1.             Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that meets APRA’s operational requirements for regulatory capital relief under Prudential Standard APS 120 Securitisation (APS 120):

(a)           special purpose vehicles (SPVs) holding securitised assets may be treated as non-consolidated independent third parties for regulatory reporting purposes, irrespective of whether the SPVs (or their assets) are consolidated for accounting purposes;

(b)          the assets, liabilities, revenues and expenses of the relevant SPVs may be excluded from the ADI’s reported amounts in APRA’s regulatory reporting returns; and

(c)           the underlying exposures (i.e. the pool) under such a securitisation may be excluded from the calculation of the ADI’s regulatory capital (refer to APS 120). However, the ADI must still hold regulatory capital for the securitisation exposures[4] that it retains or acquires and such exposures are to be reported in Reporting Form ARF 120.1 Securitisation – Regulatory Capital. The risk-weighted assets (RWA) relating to such securitisation exposures must also be reported in Reporting Form ARF 110.0.1 Capital Adequacy (Level 1) and Reporting Form ARF 110.0.2 Capital Adequacy (Level 2).

2.             Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that does not meet APRA’s operational requirements for regulatory capital relief under APS 120, , or the ADI undertakes a funding-only securitisation or synthetic securitisation, such exposures are to be reported as on-balance sheet assets in APRA’s regulatory reporting returns. In addition, these exposures must also be reported as a part of the ADI’s total securitised assets within Reporting Form ARF 120.2 Securitisation – Supplementary Items.

Extended Licensed Entity (ELE)

This means, in relation to a locally-incorporated ADI:

(a)           the ADI; and

(b)          all subsidiaries of the ADI that have been approved under Prudential Standard APS 110 Capital Adequacy (APS 110) for the purposes of Prudential Standard APS 222 Associations with Related Entities (APS 222) (each made under s 11AF of the Banking Act 1959) taken together and treated as if they formed a single entity for the purposes of measuring the ADI’s exposures to related entities.

Subject to specific requirements, APRA may deem a subsidiary of an ADI (other than an entity regulated by APRA or by a foreign equivalent) to be part of the ADI itself for the purposes of measuring the ADI’s exposures to related entities (refer to APS 110 and APS 222).

Related entities

All entities controlled (whether directly or indirectly) by an ADI (other than subsidiaries that form part of its ELE), or by the ultimate domestic parent of an ADI (including the parent entity itself) represent a “related entity” of an ADI.  A “related entity” excludes the foreign parent(s) of an ADI, the foreign parent’s overseas based subsidiaries and their directly owned non-ADI entities operating in Australia.[5]  Where appropriate, APRA may deem that other entities (and their subsidiaries) represent a “related entity” of an ADI.

Subsidiary

This is defined in accordance with the definition provided in AASB 127 Consolidated and Separate Financial Statements (AASB 127) as “an entity that is controlled by another entity (known as the parent)” unless otherwise instructed by APRA.

Control is defined by AASB 127 as “the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities”.

Parent entity

This is defined by AASB 127 as meaning “an entity that has one or more subsidiaries”.

Exposures

An exposure to an entity is the aggregate of all claims, commitments and contingent liabilities arising from on- and off-balance sheet transactions (in both the banking and trading books) with the entity.  This includes equity investment in the entity.

Note: Where credit risk is unequivocally transferred from the entity to another entity by an irrevocable letter of credit or a direct guarantee, the exposure is to be recorded against the other entity.

On-balance sheet exposures

This refers to items of assets that are recognised or recorded on the statement of financial position of the ADI/ELE (as appropriate).

Off-balance sheet exposures

This refers to items of assets or liabilities that are not recognised or recorded on the statement of financial position of the ADI because they do not satisfy the asset or liability accounting recognition requirements. Items that were treated as off-balance sheet items for the purpose of this form, pre-IFRS, will continue to be treated as off-balance sheet items, post-IFRS.

Instruction guide for specific items

The form has the following reporting components:

Part A: 10 Largest exposures to related entities

Part A is to be completed by all Australian-owned banks and foreign subsidiary banks, and locally-incorporated non-bank ADIs on a licensed ADI or ELE basis (where applicable).  Report in this part on a net basis (explained in detail below) the ADI’s/ELE’s (as appropriate) 10 largest exposures to individual related entities.

The following instructions are applicable to Part A of this form.

Name of entity

Report in column 1 the names of the relevant individual related entities to which the ADI/ELE (as appropriate) has exposures to.

Category

Report in column 2 the category of the related entity reported in column 1 using the following abbreviations:

·                ADI for related ADIs (including overseas based equivalents);

·                OR for other regulated related entities (i.e. any related entity other than an ADI or overseas based equivalent directly regulated by APRA or by a foreign equivalent); or

·                UR for unregulated related entities.

On-balance sheet exposures

Report all on-balance sheet exposures to the related entity noted in column 1.  This includes all loans and advances to the related entity, equity investment in the related entity, and all other claims on the related entity.  Any accrued interest associated with the exposure should also be included.

3.1      Equity investment

Report in column 3.1 the book value of equity investment in the related entity.  Exclude any equity investment in the related entity that has been deducted from the ADI’s Level 1 (stand-alone) capital for capital adequacy purposes (refer to Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111)).

3.2      Other

Report in column 3.2 the book value of all other on-balance sheet exposures to the related entity on a net basis.  Net basis means net of exposures excluded under paragraphs 27(b)(ii)-(vi) in APS 222, specifically:

·                exposures deducted from the ADI’s Level 1 (stand-alone) capital for capital adequacy purposes (refer to APS 111);

·                exposures to the extent that they are secured by cash deposits (subject to satisfying the criteria set out in APS 112);

·                exposures to the extent that they are guaranteed by governments, or secured by government securities (subject to satisfying the conditions set out in APS 112);

·                exposures arising in the course of settlement of market-related contracts; and

·                exposures to the extent that they have been written off or specifically provided for.

Off-balance sheet exposures

4.1.    Non-market related

This includes all commitments, whether revocable or not, which have been advised to the related entity reported in column 1 (refer to Table 3 in Attachment B to APS 112 for examples of these commitments). 

Exclude:

·                internal limits that have not been formally advised to the related entity and may be cancelled at the ADI’s/ELE’s (as appropriate) discretion.

Report in column 4.1 the value of all unused commitments to the related entity (do not apply credit conversion factors or risk weightings to the value) on a net basis (i.e. net of exposures excluded under paragraphs 27(b)(ii)-(vi) in APS 222 as detailed in point 3.2 above).

Exposures arising from repos (i.e. sale and repurchase agreements) and reverse repos (i.e. purchase and resale agreements) of securities should be reported as exposures to the issuer of the securities and collateralised loans to the counterparty respectively.

4.2.    Market related

Include:

·                all exposures arising from off-balance sheet market related contracts with the related entity reported in column 1 (refer to Attachment B to APS 112) for examples of these contracts).

Report in column 4.2 the credit equivalent amounts of all market related contracts on a net basis (i.e. net of exposures excluded under paragraphs 27(b)(ii)-(vi) in APS 222 as detailed in point 3.2 above).  The credit equivalent amounts of these contracts are to be calculated in accordance with Attachment B of APS 112 or Attachment J to APS 112 where netting applies.  Netting by novation and close-out netting are permissible for market related contracts provided all the requirements set out in Attachment J to APS 112 for bilateral netting are met.

Total exposures

5.1      Amount

This represents the total of column numbers 3.1, 3.2, 4.1 and 4.2.

5.2      As % of capital base

This represents the value reported for column 5.1 divided by the ADI’s capital base as reported in ‘Memorandum items’ (i).

Memorandum items

(i)        Capital base of licensed ADI

Report the ADI’s capital base at Level 1 for the reporting quarter (as shown in ARF 110.0.1 Capital Adequacy (Level 1) and ARF 110.0.2 Capital Adequacy (Level 2) for the same reporting quarter).

(ii)       Aggregate exposure to all related ADIs (including overseas based equivalents)

Report the ADI’s/ELE’s (as appropriate) aggregate exposure to all related ADIs and related overseas based equivalents on a net basis (i.e. net of exposures excluded under paragraphs 27(b)(ii)-(vi) in APS 222 as detailed in points 3.1 and 3.2 above).

(iii)      Aggregate exposure to all related entities other than related ADIs and related overseas based equivalents

Report the ADI’s/ELE’s (as appropriate) aggregate exposure to all related entities other than related ADIs and related overseas based equivalents on a net basis (i.e. net of exposures excluded under paragraphs 27(b)(ii)-(vi) in APS 222 as detailed in points 3.1 and 3.2 above).

Part B: 10 Largest exposures to ELE-eligible subsidiaries

Part B is to be completed by all Australian-owned banks and foreign subsidiary banks and locally-incorporated non-bank ADIs that have APRA-approved ELE-eligible subsidiaries.  Report in this part on a net basis (explained in detail below) the ADI’s 10 largest exposures to individual subsidiaries that form part of the ADI’s ELE (i.e. 10 largest exposures to ELE-eligible subsidiaries).

The following instructions are applicable to Part B of this form.

Name of entity

Report in column 1 the names of the relevant individual ELE-eligible subsidiaries to which the ADI has exposures.

On-balance sheet exposures

Report all on-balance sheet exposures to the subsidiary noted in column 1.  This includes all loans and advances to the subsidiary, equity investment in the subsidiary, and all other claims on the subsidiary.  Any accrued interest associated with the exposure should also be included.

Equity investment

Report in column 2.1 the book value of equity investment in the subsidiary.  Exclude any equity investment in the subsidiary that has been deducted from the ADI’s Level 1 (stand-alone) capital for capital adequacy purposes (refer to APS 111).

Other

Report in column 2.2 the book value of all other on-balance sheet exposures to the subsidiary on a net basis.  Net basis means net of the following exposures:

·                exposures deducted from the ADI’s Level 1 (stand-alone) capital for capital adequacy purposes (refer to APS 111);

·                exposures to the extent that they are secured by cash deposits (subject to satisfying the criteria set out in Attachment B to APS 112;

·                exposures to the extent that they are guaranteed by governments, or secured by government securities (subject to satisfying the conditions set out in APS 112);

·                exposures arising in the course of settlement of market-related contracts; and

·                exposures to the extent that they have been written off or specifically provided for.

1.         Off-balance sheet exposures

3.1      Non-market related

Include:

·                all commitments, whether revocable or not, which have been advised to the subsidiary reported in column 1 (refer to Attachment B to APS 112 for examples of these commitments).

Exclude:

·                internal limits that have not been formally advised to the subsidiary and may be cancelled at the ADI’s discretion.

Report in column 3.1 the value of all unused commitments to the subsidiary (do not apply credit conversion factors or risk weightings to the value) on a net basis (i.e. net of exposures detailed in point 2.2 above).

3.2      Market related

Include:

·                all exposures arising from off-balance sheet market related contracts with the subsidiary reported in column 1 (refer to Attachment B to APS 112 for examples of these contracts).

Report in column 3.2 the credit equivalent amounts of all market related contracts on a net basis (i.e. net of exposures detailed in point 2.2 above).  The credit equivalent amounts of these contracts are to be calculated in accordance with Attachments B and Attachment J of APS 112 where netting applies.  Netting by novation and close-out netting are permissible for market related contracts provided all the requirements set out in Attachment J of APS 112 for bilateral netting are met.

2.         Total exposures

This represents the total of column numbers 2.1, 2.2, 3.1 and 3.2.

3.         Memorandum item

Aggregate exposure to all ELE-eligible subsidiaries

Report the ADI’s aggregate exposure to all ELE-eligible subsidiaries on a net basis (i.e. net of exposures detailed in points 2.1 and 2.2 above).

Part C: Exposures to head office, overseas branches, Australian and overseas subsidiaries

Part C is to be completed by all foreign ADIs that operate as branches in Australia.  Report in this part on a net basis (explained in detail below) exposures of the Australian branch to head office, to individual overseas branches, as well as to individual Australian and overseas subsidiaries of parent.

The following instructions are applicable to Part C of this form.

1.         Name of entity

Report in column 1 the name of the entity to which the Australian branch has exposures to.

2.         On-balance sheet exposures

This includes all loans and advances and all other claims on the entity noted in column 1.  Any accrued interest associated with the exposure should also be included.

Report in column 2 the book value of all on-balance sheet exposures to the entity on a net basis.  Net basis means net of the following exposures:

·                exposures to the extent that they are secured by cash deposits (subject to satisfying the criteria set out in Attachment H to APS 112);

·                exposures to the extent that they are guaranteed by governments, or secured by government securities (subject to satisfying the conditions set out in APS 112);

·                exposures arising in the course of settlement of market-related contracts; and

·                exposures to the extent that they have been written off or specifically provided for.

3.         Off-balance sheet exposures

3.1      Non-market related

Include:

·                all commitments, whether revocable or not, which have been advised to the entity reported in column 1 (refer to Table 3 of Attachment B to APS 112 for examples of these commitments).

Exclude:

·                internal limits that have not been formally advised to the entity and may be cancelled at the branch’s discretion.

Report in column 3.1 the value of all unused commitments to the entity (do not apply credit conversion factors or risk weightings to the value) on a net basis (i.e. net of exposures detailed in point 2 above).

Exposures arising from repos (i.e. sale and repurchase agreements) and reverse repos (i.e. purchase and resale agreements) of securities should be reported as exposures to the issuer of the securities and collateralised loans to the counterparty respectively.

3.2      Market related

Include:

·                all exposures arising from off-balance sheet market related contracts with the entity reported in column 1 (refer to Attachment B to APS 112 for examples of these contracts).

Report in column 3.2 the credit equivalent amounts of all market related contracts on a net basis (i.e. net of exposures detailed in point 2 above).  The credit equivalent amounts of these contracts are to be calculated in accordance with Attachment J to APS 112 where netting applies.  Netting by novation and close-out netting are permissible for market related contracts provided all the requirements set out in Attachment J to APS 112 for bilateral netting are met.

4.         Total exposures

This represents the total of column numbers 2, 3.1 and 3.2.

 



[1]           The definitions of ‘credit union’ and ‘other ADI’ in paragraph 177 of this Reporting Standard provide that Cairns Penny Savings & Loans Limited is to be treated in accordance with the reporting period requirements applicable to credit unions for the purposes of paragraph 10.

[2]           Monetary items are defined to mean units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.  Spot rate means the exchange rate for immediate delivery.

[3]           Examples of non-monetary items include amounts prepaid for goods and services (e.g. prepaid rent); goodwill; intangible assets; physical assets; and provisions that are to be settled by the delivery of a non-monetary asset.

[4]           Securitisation exposures are defined in accordance with APS 120.

[5]           The ADI’s exposures to these entities are to be reported in ARF 221.0 Large Exposures under Part A or Part B memorandum items as appropriate.