APRA finalized the Reporting Standard ARS 701.0 on Australian Bureau of Statistics/Reserve Bank of Australia (ABS/RBA) Definitions for the Economic and Financial Statistics (EFS) Collection (ARS 701.0) and Reporting Practice Guide RPG 701.0 on ABS/RBA Reporting Concepts for the EFS Collection (RPG 701.0). Additionally, APRA released a letter on its response to submissions on the proposed changes to reporting consolidation for securitization special purpose vehicles (SPVs). In line with the original proposal, the first reporting period will be for the period ending July 2019. ARS 701.0 commences on July 01, 2019.
In May 2019, ABS, APRA, and RBA (collectively the agencies) had proposed changes to reporting requirements for registered financial corporations that are not a related party of an authorized deposit-taking institution. APRA had proposed changes to the EFS data collection related to the consolidation of securitization SPVs. APRA received one submission from an industry body. The submission agreed that proposed changes to the EFS collection were the best way to capture the bulk of the securitization industry, as intended. The submission noted issues to consider on the structure and control relationship of SPVs and suggested a change to the reporting dates for registered financial corporations. Based on the outcome of the consultation, APRA will proceed with the proposed changes to ARS 701.0 and the consequential changes to RPG 701.0.
The changes require a registered financial corporation that is not a related party of an authorized deposit-taking institution to consolidate the positions and transactions of all securitization SPVs in a single set of reporting for EFS. These changes do not apply to a registered financial corporation that is a related party to an authorized deposit-taking institution. The assets and liabilities of securitization SPVs would, therefore, be consolidated on to the domestic books of a registered financial corporation. Assets originated into, or transferred to, an SPV are included in the reporting of a registered financial corporation. The requirement for an external auditor’s report, as set out in Standard RRS 710 on Audit Requirements for Registered Financial Corporations—EFS collection, will apply to the reporting registered financial corporation, not the individual SPVs.
Effective Date: July 01, 2019 (ARS 701.0)
Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, EFS Collection, ARS 701.0, RPG 701.0, Response to Consultation, Securitization, Special Purpose Vehicle, Reporting, APRA
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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