Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 (10 of 2018)

Schedule 1   Amendment of the Banking Act 1959

Part 1   Main amendments

Banking Act 1959

34   Subsection 11CA(1AA)

Repeal the subsection, substitute:

(1AA) APRA may give a body corporate that is an ADI or is an authorised NOHC a direction of a kind specified in subsection (2) if APRA has reason to believe that:

(a) a subsidiary of the body corporate has contravened a provision of:

(i) this Act; or

(ii) the Financial Sector (Collection of Data) Act 2001; or

(b) a subsidiary of the body corporate has contravened a prudential requirement regulation or a prudential standard; or

(c) a subsidiary of the body corporate is likely to contravene this Act, a prudential requirement regulation, a prudential standard or the Financial Sector (Collection of Data) Act 2001; or

(d) the direction is in respect of a subsidiary of the body corporate and is necessary in the interests of:

(i) if the body corporate is an ADI - depositors of the ADI; or

(ii) if the body corporate is an authorised NOHC - depositors of any ADI that is a subsidiary of the NOHC; or

(e) a subsidiary of the body corporate is, or is about to become, unable to meet the subsidiary's liabilities; or

(f) there is, or there might be, a material risk to the security of the assets of a subsidiary of the body corporate; or

(g) there has been, or there might be, a material deterioration in the financial condition of a subsidiary of the body corporate; or

(h) a subsidiary of the body corporate is conducting the subsidiary's affairs in an improper or financially unsound way; or

(j) a subsidiary of the body corporate is conducting the subsidiary's affairs in a way that may cause or promote instability in the Australian financial system; or

(k) a subsidiary of the body corporate is conducting the subsidiary's affairs in a way that may cause it to be unable to continue to supply services to:

(i) if the body corporate is an ADI - the ADI; or

(ii) if the body corporate is an authorised NOHC - any ADI that is a subsidiary of the NOHC; or

(l) the direction is in respect of a subsidiary of the body corporate and the failure to issue a direction would materially prejudice the interests of:

(i) if the body corporate is an ADI - depositors of the ADI; or

(ii) if the body corporate is an authorised NOHC - depositors of any ADI that is a subsidiary of the NOHC.

(1AB) However, APRA can only make a direction as a result of a ground referred to in paragraph (1AA)(a), (b), (c), (e), (f), (g), (h) or (k) if APRA considers that the direction is reasonably necessary for one or more prudential matters relating to the body corporate.

(1AC) APRA may give a body corporate that is a subsidiary of an ADI or of an authorised NOHC a direction of a kind specified in subsection (2) if:

(a) APRA has given the ADI or authorised NOHC a direction under subsection (1AA) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary; or

(b) APRA may give the ADI or authorised NOHC a direction under subsection (1AA) because one or more of the grounds referred to in that subsection have been satisfied in respect of the subsidiary.

(1AD) APRA cannot give a direction under subsection (1AC) to a body corporate of a kind specified in regulations (if any) made for the purposes of this subsection.

(1AE) Subsections (1), (1AA) and (1AC) do not limit each other.