Australian Prudential Regulation Authority Instrument fixing charges No. 3 of 2018

The instrument rests on a small number of discrete legal and administrative concepts. Each concept appears in the instrument text and structures how payment, classification and discretion operate.

Fixed application charge

• The core concept is a fixed charge for the processing of a new authorisation or registration application. The Schedule lists seven items, each pairing an application type with a set monetary amount (most commonly $110,000; one exception at $55,000), the applicant as payer, and payment required "on lodgement of the application". The Schedule therefore converts the cost of APRA’s authorisation function for those application types into a single upfront monetary requirement.

GST exemption

• The Schedule declares each charge "GST exempt" and identifies Note 1, referencing Division 81 of A New Tax System (Goods and Services Tax) Act 1999. The instrument treats the charges as non-GSTable by operation of that Division; the document itself does not re-state the legal test but records the position (Schedule note (a)).

Defined entity categories

• The instrument relies on cross-references to external Acts for entity definitions rather than defining them afresh. "ADI" is defined by reference to sub‑section 5(1) of the Banking Act 1959; "general insurer", "life company" and "friendly society" are referenced to the Insurance Act 1973 and the Life Insurance Act 1995 (Schedule, Interpretation). The Schedule items map to these external categories (for example, authorisation as an ADI to carry on business as a bank, as a building society or credit union, or as a provider of purchased payment facilities).

Waiver/refund discretion and constraints

• The instrument gives APRA a discretionary power to waive or refund charges "in whole or in part" where it is satisfied that "special circumstances apply which would make it unjust or oppressive to impose a part of the charge, or the full amount" (Schedule note (b)). The instrument supplies an example (wrong kind of authorisation applied for and withdrawal before APRA has done substantial work) but treats it as illustrative rather than exhaustive. The power is constrained by an explicit exception: no refund/waiver where the application is unsuccessful; or where APRA has informed the applicant the application will be unsuccessful; or where the applicant withdraws or does not proceed (Schedule note (c)). The process requires a written application from an applicant seeking refund or waiver, setting out the special circumstances (Schedule note (d)).

Administrative timing

• The payment timing is categorical: "On lodgement of the application" for each listed item. The instrument does not qualify that timing with instalments, staged payments or post-decision charging.

Revocation and commencement

• The instrument formally revokes the earlier instrument that fixed charges in 2013, establishing continuity and replacement. It is triggered into force upon registration on the Federal Register of Legislative Instruments.

In short, the main concepts are fixed, upfront, GST-exempt application charges tied to particular APRA authorisations/registrations; payer identified as the applicant; APRA retains discretionary but constrained refund/waiver power; and entity types are defined by reference to other Acts rather than within the instrument.

The instrument identifies the affected persons narrowly and precisely. It applies to applicants seeking APRA authorisation or registration in the specific categories set out in the Schedule. That group can be described as follows.

Directly affected: applicants for authorisation or registration

• The Schedule specifies that the "Person required to pay the charge" is the applicant for each item. Thus every entity that seeks to make a new application for:
  • authorisation as an ADI under s 9 of the Banking Act 1959 to carry on business as a bank, or as a building society or credit union, or as an ADI provider of purchased payment facilities, or other ADI authorisation (Items 1-4); or
  • authorisation as a general insurer under s 12 of the Insurance Act 1973 (Item 5); or
  • registration as a life company under s 21 of the Life Insurance Act 1995, including friendly societies subject to s 16C(2) (Items 6-7), is directly affected because they must, per the Schedule, pay the relevant charge on lodgement.

Potentially affected: advisers, lenders, and acquirers

• Professional advisers (lawyers, accountants, corporate advisers), transaction counterparties, potential funders and purchasers will be affected indirectly because the fixed charge is a front‑end cost of any transaction that requires an APRA authorisation or registration. The instrument does not itself prescribe who ultimately bears the economic cost, but it places the legal obligation to pay on the applicant at lodgement.

Organisational and policy administrators within APRA

• APRA officers are affected in that they now administer the fixed-charge regime: they have the delegated authority to collect fees, exercise waiver/refund discretion, and determine whether "substantial work" has been performed for the purposes of refund decisions (Schedule note (b) gives APRA authority to assess special circumstances). The instrument was made by a delegate, indicating internal delegation pathways are in place for such instruments.

Market entrants and structuring decisions

• Entities contemplating entry into banking, building societies, credit unions, purchased payment facilities, general insurance, or life insurance markets will be affected by the addition of a fixed upfront cost. While the instrument itself does not expressly address market structure, its amount structure (common $110,000; discounted $55,000 for purchased payment facilities) creates a clear financial hurdle to new applications of those types.

Not affected: existing authorised/registered entities (unless they reapply)

• The Schedule applies to "applications" for authorisation or registration. It does not purport to levy ongoing levies on existing authorised ADIs, insurers or life companies, nor does it apply to renewals (the instrument text is confined to "applications for authorisation or registration"). Existing entities are therefore not directly charged under this instrument unless they submit a fresh application.

In summary, the instrument places an immediate cash obligation on any entity that is the formal applicant for the listed APRA authorisations or registrations, and it creates downstream implications for advisers, transaction economics, and APRA administrative practice.

The instrument creates a small set of duties and situational rights. They are administrative in nature and concern payment, application classification, and the right to seek a waiver or refund.

Duties (what applicants must do)

• Payment duty: The primary duty imposed by the instrument is the obligation that the applicant pay the fixed charge specified in the Schedule "On lodgement of the application" (Schedule table, "When the charge is to be paid"). For each item the applicant is the "Person required to pay the charge" (Schedule table).
• Classification duty: Applicants must select the correct application type because the Schedule assigns different charges depending on the type of authorisation or registration sought (e.g. purchased payment facilities attract a $55,000 charge under item 3, other ADI authorisations attract $110,000 under items 1, 2 and 4). The instrument treats the chosen application category as determinative for which charge applies.
• Formality for waiver/refund: An applicant seeking a waiver or refund must apply in writing to APRA and set out the details of the special circumstances (Schedule note (d)). That is a procedural duty prescribed by the instrument.

Rights (what applicants may request or expect)

• Limited waiver/refund entitlement: Applicants have the right to be considered for a waiver or refund where APRA is satisfied "special circumstances apply" such that it would be unjust or oppressive to impose the charge in whole or in part (Schedule note (b)). The instrument gives an example where a waiver or refund "may be justified" , namely where an applicant applies for the wrong authorisation by mistake and withdraws before APRA has done substantial work , but it frames the example as illustrative of the sort of case APRA might accept.
• Right to be informed about non-refund situations: The instrument makes explicit that no refund or waiver will be made in particular situations (Schedule note (c)): if the application is unsuccessful; if APRA, in the course of processing, informs the applicant the application will be unsuccessful; or if the applicant withdraws or does not proceed. The applicant therefore has a substantive right to rely on the categorical nature of those no-refund rules rather than any implicit refund entitlement in such circumstances.
• Right to validation of GST treatment: The Schedule states each charge is GST exempt and references Division 81 of the GST Act (Schedule note (a)). The instrument gives applicants notice of that tax treatment; applicants can therefore account for the fee as GST-exempt in budgeting and tax treatment.

Discretion and decision-making

• APRA's discretionary right to waive or refund charges is a right of the regulator, not of the applicant. APRA "may waive or refund" fees if satisfied that special circumstances apply (Schedule note (b)). The instrument does not provide a public criteria list beyond the reference to "special circumstances" and the illustrative example; APRA determines whether the test is met.

Non-specified duties and rights

• The instrument does not create duties on APRA beyond the grant of discretion to waive or refund in specified circumstances. It does not prescribe timeframes for APRA decisions on waiver/refund applications nor does it set procedural appeal rights in the instrument text. It also does not specify consequences for non-payment apart from the timing statement that the charge is payable on lodgement.

In summary, the instrument imposes an upfront payment duty on applicants, requires correct classification of application type for charging purposes, grants APRA a discretionary but unconstrained save for the "no refund" exceptions, and gives applicants a procedural right to apply in writing for a waiver or refund.

The instrument fixes charges and sets payment timing, but it does not itself create explicit penalties, enforcement mechanisms, or sanctioning procedures for failure to pay. The following points summarise the enforcement-related content that is present, and note what is absent.

What the instrument does specify

• Payment timing: For each listed item the charge is "On lodgement of the application" (Schedule table, final column). This places the legal obligation on the applicant to provide funds at the time of filing the application with APRA.
• Payer identification: The Schedule explicitly records that the "Person required to pay the charge" is the applicant for all items (Schedule table, fourth column). That identifies the legal debtor for the charge.

What the instrument does not specify

• No express sanction for non-payment: The instrument contains no clause describing the consequence of non-payment (for example, that the application will be treated as invalid, returned, or not accepted). It does not provide for late payment interest, debt recovery steps, administrative penalties, or refusal of acceptance on non-payment within the instrument text.
• No criminal or civil penalty provision: The instrument does not create offences, fines, or civil penalties for non-payment of the charge. It merely fixes the amount and the timing.
• No explicit enforcement procedure: There is no provision in the instrument that sets out APRA’s internal collection, refusal-to-process, or lien-like rights over applications that are not accompanied by payment. Any operational rules about whether APRA will accept and process an application that is not paid are therefore left unstated in this instrument.

Discretionary refund/waiver enforcement

• APRA's discretion to waive or refund a charge is conditional on the regulator being "satisfied that special circumstances apply" and requires written application by the applicant (Schedule notes (b)-(d)). The instrument also specifies categorical situations where no refund or waiver will be made (Schedule note (c)): where the application is unsuccessful; where APRA informs the applicant that the application will be unsuccessful; or where the applicant withdraws or does not proceed. Those stipulations operate as enforceable conditions for the regulator’s discretion.

Implications of the absence of enforcement detail

• Because the instrument lacks express provisions about the consequences of non-payment, affected parties must look to APRA’s administrative practice, any relevant provisions in the enabling legislation (the APRA Act or the specific authorisation Acts), or other APRA instruments or guidance for operational enforcement rules. The instrument itself does not supply enforcement machinery.

In short, this instrument is pricing and discretionary-refund focused. It requires payment on lodgement and identifies the applicant as the payer, but it does not set out statutory penalties, recovery steps, or explicit application-process consequences for non-payment within the instrument text.

The instrument explicitly ties itself to several other statutes and presupposes interaction with their definitions and tax treatment. The document relies heavily on cross-references rather than restating external provisions. The principal interactions are as follows.

Australian Prudential Regulation Authority Act 1998

• Source of power: The instrument is made under paragraph 51(1)(b) of the APRA Act (instrument preamble). That paragraph is cited as the statutory authority enabling APRA (via delegate) to fix charges. The instrument therefore operates under the delegated powers and within the statutory framework of the APRA Act.

Acts Interpretation Act 1901

• Interpretation/formal making authority: Subsection 33(3) of the Acts Interpretation Act 1901 is cited in the preamble in relation to revocation of the prior instrument, indicating formal compliance with legislative instrument-making rules and interpretation norms.

Banking Act 1959, Insurance Act 1973 and Life Insurance Act 1995

• Definitions and application triggers: The instrument depends on the definitions and authorisation/registration rules in these sector Acts by referencing them in the instrument's Interpretation and in the Schedule:
  • "ADI" is defined by reference to sub-Section 5(1) of the Banking Act 1959. The Schedule imposes charges for authorisation under Section 9 of the Banking Act.
  • "General insurer" is cited to Section 3 of the Insurance Act 1973; the Schedule imposes charges on application for authorisation under Section 12 of the Insurance Act.
  • "Life company" and "friendly society" references point to the Life Insurance Act 1995 (Schedule items 6 and 7 reference Section 21 and s 16C(2) of the Life Act).
• The instrument therefore interacts procedurally and substantively with these Acts: applicants who are subject to those Acts will fall into the charge categories in the Schedule. Any procedural preconditions or consequences in those Acts (not stated in this instrument) may alter how application lodgement and payment interact.

A New Tax System (Goods and Services Tax) Act 1999

• GST treatment: The instrument records that each charge is "GST exempt" and cites Division 81 of the GST Act (Schedule note (a)). This is a tax interaction: the Schedule treats the charge as outside the GST base and signals that APRA considers the charge not subject to GST. The instrument itself does not restate the GST statutory test; it signals the tax position for budgeting and invoicing.

Legislation Act 2003 / Federal Register of Legislative Instruments

• Commencement: The instrument commences on the date it is registered on the Federal Register of Legislative Instruments under the Legislation Act 2003. The document therefore follows the procedural rules for legislative instruments and interacts with the registration regime for commencement.

Interaction by omission

• The instrument does not reference other administrative guidance, fee collection rules, or APRA’s broader funding model. It also does not specify whether the charges feed into APRA’s budgetary or appropriation structures; however, because the instrument is made under APRA Act authority, it operates within whatever financial management and appropriation framework governs APRA collections (not stated here).

Practical interface consequences

• Applicants need to map their intended application to the correct statutory pathway in the Banking, Insurance or Life Acts because the instrument fixes charges by reference to those statutory application types. The GST status declared in the instrument requires applicants and their tax advisers to treat the fee as GST-exempt per Division 81, and APRA staff will need to record and invoice accordingly.

In sum, the instrument functions in conjunction with sectoral Acts for defining the application types and with the GST Act for tax treatment; it relies on the APRA Act and legislative instrument formalities for its legal foundation and commencement.

The instrument itself is short and records a minimal amendment history. The text contains one explicit revocation and establishes the instrument as a replacement.

Revocation of prior instrument

• The instrument expressly revokes "Instrument Fixing Charges No. 1 of 2013 dated 8 March 2013" (instrument preamble, paragraph (i)). This is the only revocation or amendment action recorded in the document. The effect is that the fees fixed by the earlier 2013 instrument are superseded by the Schedule in this 2018 instrument.

New fixing of charges

• Paragraph (ii) of the instrument's preamble states that, under the APRA Act power, the delegate "FIX the charges specified in the attached Schedule." That is the substantive amendment to APRA’s charging regime effected by this instrument: it replaces the prior Schedule with a new Schedule effective from the instrument’s commencement.

Commencement and registering

• The instrument specifies its commencement as "on the date of registration on the Federal Register of Legislative Instruments under the Legislation Act 2003." The instrument is dated 7 June 2018 and bears a signature. There is no later recorded amendment to or repeal of this instrument within the source document.

Absence of subsequent amendments in the text

• The instrument does not include any notation of later amendments, transitional provisions, staged increases, indexation, or sunset clauses. Nor does it record delegated amendments or conditional increases tied to other indices or budgets. The Schedule lists static dollar amounts.

Practical record-keeping

• Because the instrument revokes an earlier instrument and replaces it, practitioners should note that the 2013 instrument is no longer operative as of the commencement date of this instrument. The instrument does not provide a transitional provision for applications lodged under the 2013 instrument prior to revocation; it merely revokes the prior instrument. For clarity on transitional treatment of previously lodged applications, users must consult APRA's administrative guidance or the earlier instrument (the text of which is not reproduced here).

No express review clause

• The instrument does not contain an express periodic review clause or require indexing, review dates, or legislative reporting concerning the sufficiency of the fixed amounts. There is therefore no statutory requirement within the instrument for future amendment or review cycles.

In short, the amendment history recorded in the instrument is limited to revoking the 2013 instrument and substituting the Schedule contained in this 2018 instrument, with commencement tied to registration on the Federal Register.

The instrument text contains no record of litigation, disputes, judicial consideration, or administrative review outcomes. The document itself is a legislative instrument and does not include annotations or references to court decisions or tribunal determinations concerning its operation.

What the instrument does disclose

• It contains no case names, no references to contested decisions, and no examples of judicial interpretation. The only substantive procedural note concerning dispute-like outcomes is Schedule note (c) which states categorically that "No refund or waiver will be made if the application is unsuccessful or if APRA, in the course of processing the application, informs the applicant that the application will be unsuccessful" , that is a policy statement, not a record of litigation.

Implications for practitioners

• Because there is no litigation history in the instrument text, practitioners cannot rely on precedent derived from this instrument's judicial interpretation for guidance. Questions about the scope of APRA's discretionary waiver/refund power, the meaning of "special circumstances", or the practical consequences of non-payment would therefore need to be resolved by reference to:
  • APRA administrative guidance and practice documents (not contained in the instrument), and
  • any judicial or tribunal decisions that have arisen since the instrument was made (not recorded here).

How to locate downstream litigation

• If a reader requires any existing case law that interprets APRA’s fee-setting instruments or waiver discretion, that material is not in this instrument and must be sought in external databases or APRA's administrative records. The instrument itself offers no litigation signposts.

In sum, the instrument does not supply a litigation history; it establishes a regime whose legal questions (e.g. the scope of "special circumstances" for waiver) remain to be developed in practice or through external adjudication.

This instrument is short but contains several practical pitfalls and operational traps for applicants and their advisers. The following are document-grounded "gotchas" a practitioner should consider when advising a client or preparing an application.

Upfront cost and timing: payable on lodgement

• Each charge is payable "On lodgement of the application" (Schedule table). The instrument makes no allowance for instalments, deposits with future balancing, or staged payments. Applicants must ensure funds are available at the time of lodgement; failing to do so could create administrative or procedural friction with the application process. The instrument does not itself specify operational consequences for non-payment.

Classification matters: choose the correct application type

• Items 1-4 differentiate ADI authorisation types (bank; building society or credit union; provider of purchased payment facilities; other ADI authorisation). The charge for purchased payment facilities is lower ($55,000, Item 3) than the other ADI categories ($110,000, Items 1, 2 and 4). If an applicant selects the wrong category and withdraws before APRA has done substantial work, the instrument suggests APRA "may" waive/refund in special circumstances (Schedule note (b)) but that is discretionary. A mistake in classification therefore risks a loss of substantial funds.

No refund if unsuccessful or withdrawn after substantive work

• Schedule note (c) is categorical that no refund or waiver will be made if the application is unsuccessful or if APRA informs the applicant the application will be unsuccessful, or if the applicant withdraws or does not proceed. Schedule note (b) gives APRA discretion to refund in narrowly described or exceptional circumstances, but the bar is high: "special circumstances" where imposing the charge would be "unjust or oppressive" and the applicant must apply in writing (note (d)). Do not assume that a withdrawal will yield a refund.

Re-application costs

• Note 2 in the Schedule states: "For the avoidance of doubt, it should be noted that the charge is payable in respect of every new application, even one that is made after the refusal or withdrawal of an earlier application for which the applicant also paid a fee." That is a direct warning: repeated attempts carry repeated charges.

GST treatment may limit tax recovery

• The Schedule declares the charges GST-exempt and references Division 81 of the GST Act (Schedule note (a)). Applicants should not treat the charge as a standard taxable expense for GST credit purposes without checking the GST Act provisions and the practical tax treatment, as the instrument records the exemption.

Waiver/refund procedure is applicant-initiated and discretionary

• To seek a waiver/refund, an applicant must "apply in writing to APRA setting out details of the special circumstances" (Schedule note (d)). The instrument does not set review timeframes, standards for APRA decision-making beyond the "special circumstances" test, or internal appeal or review procedures. Applicants should therefore factor in uncertainty and delay in any waiver/refund request.

No statutory enforcement detail for non-payment

• The instrument does not state the procedural effect of failing to pay at lodgement (no express rule that the application will not be accepted or will be returned). Because that detail is absent, applicants should proactively confirm APRA's operational rules before lodging to avoid inadvertent delay or rejection.

Scope limitation

• The instrument applies only to specified application types; it does not charge existing authorised entities, nor does it mention renewals, variations, or post-authorisation activities. Do not assume it creates a recurring fee or applies beyond the listed application pathways.

Example language is illustrative only

• The instrument’s example of a waiver situation (wrong authorisation applied for and withdrawal before APRA has done substantial work) is expressly an example; it does not circumscribe APRA's discretion and should not be relied upon as a guaranteed basis for refund.

No stated indexing or review

• The fixed dollar amounts are static in the instrument; there is no indexation clause or review schedule. Future fee levels, increases or indexation must be effected by later instruments; applicants cannot assume incremental annual adjustment is permitted under this instrument.

In short, the main practical pitfalls are the fixed, upfront nature of the charge; the classification sensitivity; the narrow and discretionary waiver route; the absence of recorded enforcement consequences for non-payment; and the GST-exempt treatment.

Complying with the instrument requires adherence to the payment, classification, and procedural rules it sets out. The following step-by-step guidance is drawn from the instrument’s language and its procedural implications.

1. Determine the correct application type under the referenced Acts

• Before lodgement, map the client’s intended authorisation or registration against the statutory categories referenced in the instrument: s 9 of the Banking Act 1959 for ADI authorisation (and sub-categories such as carry on business as a bank, building society or credit union, purchased payment facilities), s 12 of the Insurance Act 1973 for general insurer authorisation, and s 21 of the Life Insurance Act 1995 for life company registration (and the friendly society pathway under s 16C(2) where applicable).
• The instrument links charges to these specific statutory application types (see Schedule items 1-7). Accurate categorisation determines which fixed charge applies.

2. Budget for the fixed charge and arrange payment at lodgement

• The Schedule requires payment "On lodgement of the application." For most categories the charge is $110,000; for purchased payment facilities it is $55,000. Ensure funds are available and that the payment mechanism APRA requires is arranged before lodgement. Because the instrument contains no instalment or deferred-payment option, the applicant should not expect to pay later.

3. Address GST accounting

• The Schedule states each charge is "GST exempt" and cites Division 81 of the GST Act (Schedule note (a)). Treat the charge as GST-exempt in accounting and invoicing, but confirm the precise GST treatment with tax advisers and APRA invoicing practice to ensure correct tax reporting.

4. Consider pre-lodgement validation to avoid incorrect application type

• Given the instrument’s explicit position that the charge is payable for each new application and that refunds are restricted, obtain pre-lodgement advice or confirmation from APRA or from advisers about the correct application pathway to avoid paying the higher fee for the wrong authorisation. The instrument’s example shows APRA may, at its discretion, refund in limited mistake scenarios, but that is not guaranteed.

5. Prepare for the waiver/refund process if contingencies arise

• If extraordinary circumstances arise (for example, demonstrable error in application type made in good faith and withdrawn before APRA completes substantial processing), prepare a written application to APRA seeking waiver or refund that sets out the "special circumstances" and why it would be "unjust or oppressive" to impose the charge (Schedule notes (b) and (d)). Expect APRA to exercise judgment; the instrument does not set review timelines or criteria beyond the high-level test.

6. Document and record payment and communications

• Keep contemporaneous records of lodgement, payment, any APRA communications about application prospects, and any withdrawal. Schedule note (c) makes refunds unavailable if APRA informs the applicant the application will be unsuccessful, or the applicant withdraws. Written evidence will be material if a waiver/refund application is later pursued.

7. Anticipate repeated application costs

• Note that the instrument states the charge is payable in respect of every new application, including one made after refusal or withdrawal of an earlier application for which a fee was also paid (Schedule note 2). Factor the possibility of repeated charges into transaction budgeting if multiple application attempts are plausible.

8. Confirm APRA operational details

• Because the instrument does not set out the consequence of non-payment at lodgement, confirm APRA's operational practices: will APRA reject an unpaid application, return it, or hold it? Clarify acceptable payment methods and whether lodgement requires evidence of payment.

9. Coordinate with transaction counterparties

• If the application is part of a corporate transaction (acquisition, de novo entry via new vehicle, conversion), ensure contractual allocation of the fee is explicit between purchaser and seller, and that parties know who is the formal applicant for APRA purposes, because the instrument charges the applicant on lodgement.

10. Monitor for replacement instruments or fee changes

• The instrument revokes a prior instrument and sets static amounts. Fee levels can change only by later instruments; therefore, monitor the Federal Register of Legislative Instruments and APRA communications for subsequent instruments that may vary charges, indexing, or procedural rules.

Following these steps will align an applicant’s operational and budgeting processes with the instrument’s legal requirements. The instrument’s clear upfront payment obligation, narrow refund exceptions, and classification dependence mean that pre-lodgement diligence and disciplined record-keeping are the principal compliance tasks.