Financial Sector (Collection of Data) (reporting standard) determination No 1 of 2017-Reporting Standard SRS 534 0 Derivative Financial Instruments [F2017L00046]-Concluded matters [2017] AUSStaCSDLM 106 (22 March 2017)

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Instrument	Financial Sector (Collection of Data) (reporting standard) determination No. 1 of 2017 - Reporting Standard SRS 534.0 Derivative Financial Instruments [F2017L00046]
Purpose	Determines Reporting Standard SRS 534.0 Derivative Financial Instruments to clarify reporting regarding directly held over the counter derivatives
Last day to disallow	9 May 2017
Authorising legislation	Financial Sector (Collection of Data) Act 2001
Department	Treasury
Scrutiny principle	Standing Order 23(3)(b)
Previously reported in	Delegated legislation monitor 2 of 2017

Retrospective commencement

The committee commented as follows:

Subsection 12(2) of the Legislation Act 2003 provides that an instrument that commences retrospectively is of no effect if it would disadvantage the rights of

a person (other than the Commonwealth) or impose a liability on a person (other than the Commonwealth) for an act or omission before the instrument's date of registration. Accordingly, the committee's usual expectation is that ESs explicitly address the question of whether an instrument with retrospective commencement would disadvantage any person other than the Commonwealth.

With reference to these requirements, the committee notes that the determination commenced retrospectively on 1 July 2016. However, the ES to the determination provides no information about the effect of the retrospective commencement on individuals.

The committee requests the advice of the minister in relation to the above.

Minister's response

The Treasurer advised:

APRA [Australian Prudential Regulation Authority] has undertaken to revise the ES to make clear that the Instrument's retrospective application did not disadvantage the rights of, or impose a liability on, any person for an act or omission that took place before the date of registration.
The Instrument was made on 5 January 2017, with a commencement date of 1 July 2016. It revoked a pre-existing Instrument (Financial Sector (Collection of Data) (reporting standard) determination No. 39 of 2015 - Reporting Standard SRS 534.0 Derivative Financial Instruments) which was made on 10 December 2015, and commenced 1 July 2016; and re-made it with one change: the inclusion of an additional option of 'not applicable'
at item 3 of Form SRF 534.0. Both versions of the Instrument required registrable superannuation entities (RSEs) to report in relation to any derivative financial instruments held.
The use of the 1 July 2016 commencement date for the re-made Instrument was intended to reduce confusion about which reporting periods it covered.
Form SRF 534.0 is an annual form and must be submitted to APRA within
3 months of the end of the RSE's year of income. The vast majority of
RSEs have a year of income which ends on 30 June. For these RSEs,
the obligation to report under the re-made Instrument has not yet commenced in practical terms, i.e. these RSE licensees will be required to submit the form by 30 September 2017, for the year ending 30 June 2017.
While there are two RSEs with non-30 June balance dates and for whom the obligation to report occurred prior to the registration of the latest version of the Instrument, APRA has established that neither of these
RSEs were affected by the change, as neither held derivative financial instruments and they both provided 'nil' returns. APRA is therefore satisfied that no person's rights were adversely affected by the 1 July 2016 commencement date.

Committee's response

The committee thanks the minister for his response and has concluded its examination of the instrument.

The committee notes the minister's undertaking that APRA will revise the ES to include information about the retrospective commencement of the determination.