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Reprieve from APRA for Religious Charitable Development Funds

The Australian Prudential Regulation Authority (APRA) has today released revised proposals on changes to the exemption order under the Banking Act 1959 (Cth) for religious charitable development funds (RCDFs). These are a response to submissions to APRA’s April 2013 discussion paper on this issue which we reported on in our e-alert of 2 May 2013 APRA moves to tighten prudential oversight over financiers and religious and charitable funds operators.


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Hunt & Hunt


APRA remains of the view that unauthorised entities should not be able to offer deposit products or products with features and characteristics that are clearly associated with product offerings of Authorised Deposit-taking Institutions. However, APRA is now proposing an extension of the exemption order for RCDFs currently exempted, but subject to additional conditions including:

  • any product offered to a retail investor will have to have a minimum term or notice period of 31 days; and
  • the use of terms ‘deposit’ and ‘at-call’ will not be allowed in relation to retail products or in marketing to retail investors.

These conditions are consistent with those that APRA has recently proposed for Registered Financial Corporations and consistent with the global principle governing the boundaries between prudentially regulated institutions and shadow banking.

APRA will continue to allow RCDFs to use BPAY to transact between affiliates of the RCDF and to offer BPAY to wholesale investors.

Charitable organisations who raise investment funds currently also have exemptions from the licensing, fundraising, debentures and managed investment provisions of the Corporations Act 2001 (Cth) under ASIC  Regulatory Guide 87 (RG 87) if they comply with the conditions to the exemptions. ASIC recently consulted on this regulation with proposals to either:

  • remove existing exemptions available to charities that raise investment funds under RG 87, or
  • retain existing exemptions on the basis that they are only available to organisations that satisfy both existing and new conditions to the exemptions.

Examples of new conditions proposed include that charities must hold 75% of their assets in assets that directly relate to their charitable purpose; and where the fund is offered to retail clients:

  • have an Australian financial services licence, and
  • meet minimum capital and liquidity requirements.

Submissions for the ASIC consultation paper closed in July 2013 and ASIC are yet to release a response.

The deadline for submissions to APRA on these revised proposals is 4 October 2013.

A full copy of the revised proposals  can be found at


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