APRA’s new capital benchmarks for banks

APRA’s new capital benchmarks for banks

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The Australian Prudential Regulation Authority (APRA) has just announced that it is increasing the capital adequacy ratios for banks and other authorised deposit-taking institutions (ADIs) in Australia, with the new rates to be in place by January 2020. Today we explain what the relevant capital adequacy ratio is, the different methods used to calculate it and describe the two new benchmarks. By Dr. Drew Donnelly, Compliance Quarter Background In Expected credit loss: the new way banks must recognise shifting credit risk we discussed APRA recent changes to the way in which banks must recognise impairment of loans. The goal with that change was to make sure banks “maintain provisions and reserves adequate to absorb existing and estimated future credit losses into its business”. Another important tool employed by APRA to…
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Government progress on cybersecurity in Australia

Government progress on cybersecurity in Australia

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Earlier this year, the Government’s cyber security advisor, Alastair MacGibbon, described a “prevailing ‘tick box’ compliance culture” for federal government agencies when it comes to cyber security. Furthermore, in a report released in May the Australian Strategic Policy Institute (ASPI) recommended various areas where the Government needs to improve its approach to cyber security, particularly, in adapting and implementing the ‘National Cybersecurity Strategy 2016-2021’. In more positive news, on July 6, the International Telecommunications Union (ITU), released its ‘Global Cybersecurity Index’, where Australia was ranked a top ten nation for its commitment to cyber security. By Dr. Drew Donnelly, Compliance Quarter In a range of articles recently we have looked at technological developments which call for strong cyber security compliance requirements, including the Productivity Commission’s proposed data-sharing regime and developments…
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AUSTRAC’s risk assessment: three areas where you may need to step up your compliance program

AUSTRAC’s risk assessment: three areas where you may need to step up your compliance program

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The Australian Transaction Reports and Analysis Centre (AUSTRAC) has just released a report (12 July) Securities & derivatives sector: money laundering and terrorism financing risk assessment revealing the vulnerabilities of the securities and derivatives sector with regards to financial crime. We recently took at AUSTRAC’s advice on the risk management obligations of businesses. We have also looked at the compliance obligations of those who trade in OTC derivatives. By Dr. Drew Donnelly, Compliance Quarter Today we review AUSTRAC’s assessment with one focus; in which areas are businesses still falling short in meeting their obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) framework. AUSTRAC’s Findings AUSTRAC’s report used three key sources in developing its risk assessment: Analysis of suspicious matter reports (SMRs), as well as other AUSTRAC intelligence Reports and…
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The Australian Tax Office and the company tax rate for small businesses – what’s all the fuss about?

The Australian Tax Office and the company tax rate for small businesses – what’s all the fuss about?

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A key part of the Government’s Budget package last year was a reduction in company tax rates for small businesses. The Australian Tax Office (ATO) recently interpreted “small business” to include companies that simply generate ‘passive income’ from investments. The Government has responded that it did not have these types of entity in mind when it decided to introduce tax cuts for small businesses. By Dr. Drew Donnelly, Compliance Quarter Today we summarise the disagreement between the ATO and the Government over the tax rate. Budget 2016: The tax enterprise plan In Budget 2016, the Government unveiled a ten-year enterprise tax plan aimed at supporting jobs and economic growth, particularly through tax relief for small businesses. One aspect of this plan was an incremental reduction in the company tax rate…
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The Crowd-funding Act and changes to the Australian Market Licence regime: The latest ASIC consultation paper

The Crowd-funding Act and changes to the Australian Market Licence regime: The latest ASIC consultation paper

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Most businesses that facilitate the trading of assets or financial instruments (‘market venues’) are required to hold an Australian Market Licence (AML), and are subject to an accompanying regulatory regime. The Corporations Amendment (Crowd-sourced Funding) Act 2017 (the CSF Act), passed into law in March, creates a bespoke regulatory regime for crowd-sourced funding. At the same time, the CSF Act amends the Corporations Act 2001 so that some ‘lesser risk’ market venues can be exempted from some obligations under the AML regulatory regime. By Dr. Drew Donnelly, Compliance Quarter On 20 July, The Australian Securities & Investments Commission (ASIC) released a consultation paper an exemption framework and inviting comment. So, what exactly is ASIC proposing? The CSF Act The key purpose of the CSF Act is to allow small unlisted…
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