{"id":"F2018L00358","name":"Banking exemption No. 1 of 2018","slug":"banking-exemption-no-1-of-2018","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":99935,"registerId":"commonwealth-F2018L00358-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Banking exemption No. 1 of 2018","content":"![](image.001.png)\n\nBanking exemption No. 1 of 2018\n\nForeign Bank Securities\n\nBanking Act 1959\n\nI, Pat Brennan, delegate of APRA:\n\n(a) under subsection 11(4) of the Banking Act 1959 (the Act) REVOKE Banking (Exemption) Order No. 82 made on 23 September 1996; and\n\n(b) under paragraphs 11(1)(b) of the Act, DETERMINE that section 66 of the Act does not apply to the class of persons described in the attached Schedule, while this determination continues in force; and\n\n(c) under paragraph 11(2)(c) of the Act, MAKE this determination subject to the conditions specified in the attached Schedule of conditions.\n\nThis instrument commences on the day it is registered on the Federal Register of Legislation.\n\nDated: 21 March 2018\n\n\\[Signed\\]\n\nPat Brennan\n\nExecutive General Manager\n\nPolicy and Advice Division\n\nInterpretation\n\nIn this Determination:\n\nAPRA means the Australian Prudential Regulation Authority.\n\nperson in accordance with section 2C of the Acts Interpretation Act 1901, includes a body corporate as well as an individual.\n\n> Note 1 This determination is a legislative instrument (see subsection 11(6) of the Act).\n\n> Note 2 Under subsection 11(3) of the Act, a person is guilty of an offence if the person does or fails to do an act and doing or failing to do that act results in a contravention of a condition to which a determination under section 11 is subject (being a determination that is in force and that applies to the person). The penalty is 200 penalty units or, by virtue of subsection 4B(3) of the Crimes Act 1914 in the case of a body corporate, a penalty not exceeding 1,000 penalty units. By virtue of subsection 11(3A) of the Act, an offence against subsection 11(3) is an indictable offence. Under subsection 11(3B) of the Act, if a person commits an offence against subsection 11(3), the person is guilty of an offence against that subsection in respect of the first day on which the offence is committed and each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).\n\nSchedule – the class of persons to whom this determination applies\n\n1.  Any foreign corporation, authorised as a bank in its home country, which raises funds in the Australian wholesale capital market by way of issuing securities.\n\nSchedule of conditions\n\n1.  The exemption is limited to permitting the use of the terms “bank”, “banker” or “banking” and words of like import.\n2.  The securities being offered and/or traded by the foreign corporation are in parcels not less than $500,000.\n    It is clearly stated on securities, and in statements prominently displayed in any promotional, marketing, disclosure and other similar material, whether in paper, electronic, website or other form, related to the issue of the securities that:\n\n        the securities are issued by an entity that is not authorised under the Banking Act 1959, and the entity is not supervised by the Australian Prudential Regulation Authority; and\n        an investment in securities issued by the entity is not covered by the depositor protection provisions in section 13A of the Banking Act 1959, and will not entitle holders of securities to claim under Division 2AA – Financial claims scheme for account-holders with insolvent ADIs in the Banking Act 1959.","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":true,"description":"This determination expressly revokes the earlier Banking (Exemption) Order No. 82 and replaces it with a narrowly framed exemption that (a) permits use of banking terms by foreign banks issuing wholesale securities, (b) limits application to parcels of at least $500,000, and (c) imposes mandatory, prominent disclosures that the issuer is not APRA‑authorised and is excluded from depositor protection and the Financial Claims Scheme. The instrument therefore changes the operative exemption; without the text of the revoked order the direction of change (broader or narrower) cannot be determined from this instrument alone."},"complexity_factors":["Revocation and replacement of a prior legislative instrument (revokes Banking (Exemption) Order No. 82).","Narrow class definition: applies only to foreign corporations authorised as banks in their home country that issue securities in the Australian wholesale capital market (Schedule).","Conditions are straightforward but legally consequential: permitted use of bank-related terms; minimum parcel size of $500,000 for securities; mandatory prominent disclosures about non‑authorisation and exclusion from depositor protection and the Financial Claims Scheme (Schedule of conditions).","Regulatory decision‑maker: APRA (via an authorised delegate) makes and revokes the determination under subsection 11(1)(b) and 11(4) of the Banking Act — administrative discretion in scope and conditions.","Cross‑statutory interaction: exemption operates by disapplying section 66 and intersects with section 13A and Division 2AA (Financial Claims Scheme) of the Banking Act, requiring coordinated statutory interpretation.","Enforcement and compliance risk: breach of a condition can attract an offence under subsection 11(3) with significant penalty-unit exposure and corporate penalties referenced to the Crimes Act (subsection 4B(3)), and is an indictable offence with continuing-day liability (subsections 11(3A),(3B)).","Ambiguity risk in subjective terms such as “prominently displayed” creates potential for enforcement or litigation to resolve standards, adding implementation uncertainty.","Operational compliance burden falls primarily on issuers and intermediaries (marketing, disclosure, documentation) and on APRA for monitoring and enforcement."],"plain_english_summary":"This instrument revokes an earlier exemption and lets foreign-incorporated banks (authorised in their home jurisdiction) use the words “bank”, “banker” or “banking” in Australia when they raise funds by issuing securities in the wholesale market, by exempting them from section 66 of the Banking Act. It only applies where securities are sold in parcels of at least $500,000 and requires clear, prominent disclosure that the issuer is not APRA‑authorised and not covered by depositor or Financial Claims Scheme protections."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"This determination maintains the same narrow scope as its predecessor (Banking (Exemption) Order No. 82 from 1996). It continues to provide a limited exemption for foreign banks raising wholesale funds in Australia. The scope has not expanded beyond this specific purpose."},"complexity_factors":["Very short document (approximately 1.5 pages)","Only 2 defined terms in the interpretation section (APRA and 'person')","Simple structure: revocation, determination, conditions","No nested exceptions or complex conditional logic","Single purpose exemption with straightforward eligibility criteria","Minimal cross-referencing (only references to specific subsections of the Banking Act 1959 and Acts Interpretation Act 1901)"],"plain_english_summary":"This exemption replaces a 1996 order and lets foreign banks authorised overseas issue securities into Australia’s wholesale market without full Australian banking authorisation, provided they meet strict disclosure and naming rules.  \n\nIt affects authorised foreign banks and wholesale investors buying parcels of at least $500,000—those investors must be warned the issuer isn’t APRA‑supervised and isn’t covered by Australia’s deposit protection. This eases market access while protecting ordinary retail depositors."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/banking-exemption-no-1-of-2018","history":"/api/acts/banking-exemption-no-1-of-2018/history","analysis":"/api/acts/banking-exemption-no-1-of-2018/analysis","conflicts":"/api/acts/banking-exemption-no-1-of-2018/conflicts","importantCases":"/api/acts/banking-exemption-no-1-of-2018/important-cases","documents":"/api/acts/banking-exemption-no-1-of-2018/documents"}}