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 www.apra.gov.au/adi/PrudentialFramework/Pages/adi-consultation-packages.aspx
Penny Cable, Sydney +61 2 9391 3160 firstname.lastname@example.org
Jill Milburn, Sydney +61 2 9391 3142 email@example.com
Richard Williams, Melbourne +61 3 8602 9218 firstname.lastname@example.org
Neville Debney, Melbourne +61 3 8602 9253 email@example.com
Mary Nemeth, Melbourne +61 3 8602 9258 firstname.lastname@example.org
Rick Harley, Adelaide +61 8 8414 3373 email@example.com
Darren Miller, Perth +61 8 9488 1318 firstname.lastname@example.org
Marcus Easthope Perth +61 8 9488 1300 email@example.com
Antony Logan, Hobart +61 3 6231 0131 firstname.lastname@example.org