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BANKING ACT 1959 - SECT 16BA

Requirement for auditors to give information about ADIs

Persons to whom requirements apply

             (1)  This section applies to a person who is or has been an auditor of a body corporate that is:

                     (a)  an ADI; or

                     (b)  an authorised NOHC; or

                     (c)  a subsidiary of an ADI or an authorised NOHC; or

                     (d)  if an ADI is a subsidiary of a foreign corporation (whether or not the ADI is itself a foreign ADI):

                              (i)  another subsidiary (a relevant Australian-incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is incorporated in Australia; or

                             (ii)  another subsidiary (a relevant foreign-incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is not incorporated in Australia and carries on business in Australia.

Matters requiring immediate notice

             (2)  If the person has reasonable grounds for believing that:

                     (a)  the body corporate is insolvent or there is a significant risk that the body corporate will become insolvent; or

                     (b)  an existing or proposed state of affairs may materially prejudice the interests of:

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

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

                            (iii)  if the body corporate is a relevant Australian-incorporated subsidiary or a relevant foreign-incorporated subsidiary of a foreign corporation--the depositors of any ADI that is a subsidiary of the foreign corporation;

the person must immediately notify APRA in writing of the matter.

Offences in relation to matters requiring immediate notice

             (3)  A person commits an offence if the person contravenes subsection (2).

Penalty:  Imprisonment for 6 months.

             (4)  A person commits an offence if the person contravenes subsection (2). This is an offence of strict liability.

Penalty:  60 penalty units.

Note:          For strict liability , see section 6.1 of the Criminal Code .

Defence if matter already notified

             (5)  Subsections (3) and (4) do not apply to a person in relation to a matter referred to in subsection (2) if:

                     (a)  the person becomes aware of the matter because the person is informed of it by a director or senior manager of the body corporate; and

                     (b)  the director or senior manager informs the person that the body corporate has notified APRA in writing of the matter; and

                     (c)  the person has no reason to disbelieve the director or senior manager.

Note:          The defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code .

Matters requiring notice as soon as practicable

             (6)  If the person has reasonable grounds for believing that:

                     (a)  the body corporate has failed or will fail to comply with:

                              (i)  a provision of this Act, the regulations, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2023 ; or

                             (ii)  if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC--a prudential standard; or

                            (iii)  if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC--a direction under Division 1BA of Part II or section 29; or

                            (iv)  if the body corporate is an ADI--a condition of the body corporate's section 9 authority; or

                             (v)  if the body corporate is an authorised NOHC--a condition of the body corporate's NOHC authority; and

                     (b)  the failure to comply is or will be significant (see subsection (7));

the person must give APRA a written report about the failure as soon as practicable, and in any event no later than 10 business days.

             (7)  For the purposes of paragraph (6)(b), a failure to comply is or will be significant if the failure is or will be significant having regard to any one or more of the following:

                     (a)  the number or frequency of similar failures;

                     (b)  the impact the failure has or will have on the body corporate's ability to conduct its business;

                     (c)  the extent to which the failure indicates that the body corporate's arrangements to ensure compliance with this Act, the prudential standards or the regulations might be inadequate;

                     (d)  the actual or potential financial loss arising or that will arise from the failure:

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

                             (ii)  to the body corporate;

                     (e)  any matters prescribed by the regulations for the purposes of this paragraph.

Offences in relation to matters requiring notice as soon as practicable

             (8)  A person commits an offence if the person contravenes subsection (6).

Penalty:  Imprisonment for 6 months.

             (9)  A person commits an offence if the person contravenes subsection (6). This is an offence of strict liability.

Penalty:  60 penalty units.

Note:          For strict liability , see section 6.1 of the Criminal Code .

Defence if failure already notified

           (10)  Subsections (8) and (9) do not apply to a person in relation to a failure to comply referred to in subsection (6) if:

                     (a)  a director or senior manager of the body corporate informs the person that the body corporate has informed APRA in writing of the failure; and

                     (b)  the person has no reason to disbelieve the director or senior manager.

Note:          The defendant bears an evidential burden in relation to the matters in subsection (10). See subsection 13.3(3) of the Criminal Code .

Offence in relation to subsections (5) and (10)

           (11)  A person commits an offence if:

                     (a)  the person is a director or senior manager of a body corporate referred to in subsection (1); and

                     (b)  the person knows that there are reasonable grounds for believing a thing referred to in subsection (2) or (6); and

                     (c)  the person informs an auditor of the body corporate that the body corporate has informed APRA in writing of the thing; and

                     (d)  the body corporate has not done so.

Penalty:  Imprisonment for 12 months.



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