As the Australian Prudential Regulation Authority (APRA) has recently taken enforcement action against an Australian authorised deposit-taking institution (ADI) under the Financial Sector (Collection of Data) Act 2001 (FSCODA)[1], we thought it timely to provide a refresher on the requirements of FSCODA and potential consequences of non-compliance.
The FSCODA regime
Under FSCODA, certain financial sector entities are required to provide APRA with statistical reports regarding their operations on a periodic basis. APRA collects these statistics to monitor Australia’s banking, insurance and superannuation systems. It also shares these statistics with the Reserve Bank and the Australian Bureau of Statistics so they can produce macroeconomic and financial indicators.
Who is required to report?
Many entities are required to report under FSCODA. Entities regulated by APRA (e.g. ADIs, foreign ADIs, NOHCs) are automatically required to report, but FSCODA extends to any corporation that engages in the provision of finance[2] in the course of carrying on business in Australia – and this includes foreign corporations that provide finance in Australia.[3] Determining whether or not FSCODA applies to an entity which is providing finance in Australia may not be straightforward and could depend on working out whether the entity is carrying on business in Australia (among other things).
What reporting is required?
The specific reporting requirements for each registrable entity are set out in reporting standards published by APRA. If a reporting entity fails to report on time, APRA may issue a penalty notice or prosecute.
A failure to report on time may also constitute a breach of the reporting entity’s other obligations, e.g. an APRA-regulated entity’s obligation to comply with prudential standards or an AFS licensee’s obligation to do all things necessary to ensure that the financial services covered by its AFS licence are provided efficiently, honestly and fairly under the Corporations Act.
Penalties
There are significant daily penalties that could apply to entities that are required to be registered under FSCODA (but are not registered) or do not provide their reports to APRA on time.
Our market-leading financial services team can assist entities in determining whether they need to be registered under FSCODA and what reporting requirements apply.
APRA announced on 4 July 2023 that it has fined BNK Banking Corporation Limited for failing to report data on time under FSCODA. See APRA’s media release here.
The “provision of finance” includes activities that result in the funding or originating of loans or other financing (s32 of FSCODA).
APRA may exempt registrable corporations from registering under FSOCDA under section 7(2), or may exempt a financial sector entity from the requirement to report under an otherwise applicable reporting standard under section 16.
