Financial Sector (Collection of Data) (reporting standard) determination No. 42 of 2008 - ARS 326.0 - Offshore Banking Units
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This form collects the assets and liabilities recorded on the books of the offshore banking unit declared under Sub-section 128 AE (2) of the Income Tax Assessment Act (1936) to be an offshore banking unit (OBU). Do not include assets and liabilities on the books of related corporations and overseas offices.
In compiling this form:
include any transactions not posted as at the reporting date;
translate all foreign currency amounts to Australian dollar equivalents using the mid of market spot rates applying as at the close of business; and
report amounts in millions of Australian dollars, rounded to the first decimal place.
"Other OBU's" refers to Australian financial institutions declared by the Federal Treasurer to be offshore banking units.
A "related corporation" is defined as a company in which the authorised deposit-taking institution (ADI) has a 20 per cent or more beneficial interest; or a company which has a 20 per cent or more beneficial interest in your institution.
"Overseas offices" includes your branches, agencies and other offices.
A "resident" is a person ordinarily resident in Australia, or an enterprise or body operating in Australia. Australian subsidiaries and branches of foreign enterprises are regarded as residents, while foreign branches and subsidiaries of Australian enterprises are regarded as non-residents.
General directions and notes
Reporting entity
The Offshore Banking Units form is to be completed by all Australian-owned banks, foreign subsidiary banks and branches of foreign banks on a Domestic books basis.
The Domestic books of the Australian-owned banks, foreign subsidiary banks and branches of foreign banks relates to the Australian books of the Australian ADI and has the following scope:
is an unconsolidated report of the Australian licensed ADI's operations/transactions that are booked inside Australia;
exclude offshore branches of the Australian licensed ADI from this reporting unit;
exclude offshore banking units based overseas from this reporting unit;
do not consolidate Australian and offshore controlled entities or associated entities that are not ADIs;
include Australian based offshore banking units of the licensed ADI; and
include transactions with non-residents recorded on Australian books.
Securitisation deconsolidation principle
Except as otherwise specified in these instructions, the following applies:
Subdivision Assets - Financial Sector (Collection of Data) (reporting standard) determination No. 42 of 2008 - ARS 326.0 - Offshore Banking Units - Assets | Zoe
Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that meets APRA’s operational requirements for regulatory capital relief under Prudential Standard APS 120 Securitisation (APS 120):
(a) special purpose vehicles (SPVs) holding securitised assets may be treated as non-consolidated independent third parties for regulatory reporting purposes, irrespective of whether the SPVs (or their assets) are consolidated for accounting purposes;
(b) the assets, liabilities, revenues and expenses of the relevant SPVs may be excluded from the ADI’s reported amounts in APRA’s regulatory reporting returns; and
(c) the underlying exposures (i.e. the pool) under such a securitisation may be excluded from the calculation of the ADI’s regulatory capital (refer to APS 120). However, the ADI must still hold regulatory capital for the securitisation exposures[1] that it retains or acquires and such exposures are to be reported in Form ARF 120.0 Standardised – Securitisation or Forms ARF 120.1A to ARF 120.1C IRB – Securitisation (as appropriate). The RWA relating to such securitisation exposures must also be reported in Form ARF 110.0 Capital Adequacy (ARF 110.0).
Where an ADI (or a member of its Level 2 consolidated group) participates in a securitisation that does not meet APRA’s operational requirements for regulatory capital relief under APS 120, or the ADI elects to treat the securitised assets as on-balance sheet assets under Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk or Prudential Standard APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk, such exposures are to be reported as on-balance sheet assets in APRA’s regulatory reporting returns. In addition, these exposures must also be reported as a part of the ADI’s total securitised assets within Form ARF 120.2 Securitisation – Supplementary Items.
Unit of measurement
Amounts denominated in foreign currency are to be converted to AUD in accordance with AASB 121 The Effects of Changes in Foreign Exchange Rates (AASB 121).
The general requirements of AASB 121 for translation are:
foreign currency monetary items outstanding at the reporting date must be translated at the spot rate at the reporting date;[2]
foreign currency non-monetary items that are measured at historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction;[3]
foreign currency non-monetary items that are measured at fair value will be translated at the exchange rate at the date when fair value was determined.
Transactions arising under foreign currency derivative contracts at the reporting date must be prepared in accordance with AASB 139 Financial Instruments: Recognition and Measurement (AASB 139). However, those foreign currency derivatives that are not within the scope of AASB 139 (e.g. some foreign currency derivatives that are embedded in other contracts) remain within the scope of AASB 121.
For APRA purposes equity items must be translated using the foreign currency exchange rate at the date of investment or acquisition. Post acquisition changes in equity are required to be translated on the date of the movement.
As foreign currency derivatives are measured at fair value, the currency derivative contracts are translated at the spot rate at the reporting date.
Exchange differences should be recognised in profit and loss in the period which they arise. For foreign currency derivatives, the exchange differences would be recognised immediately in profit and loss if the hedging instrument is a fair value hedge. For derivatives used in a cash flow hedge, the exchange differences should be recognised directly in equity.
The ineffective portion of the exchange differences in all hedges would be recognised in profit and loss; and
translation of financial reports of foreign operations.
A foreign operation is defined in AASB 121 as meaning an entity that is a subsidiary, associate, joint venture or branch of a reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity.
Exchange differences relating to foreign currency monetary items that form part of the net investment of an entity in a foreign operation, must be recognised as a separate component of equity.
Translation of financial reports should otherwise follow the requirements in AASB 121.
Reporting period
The form is to be completed as at the last day of the reporting month. Australian-owned banks, foreign subsidiary banks and branches of foreign banks should submit the completed form to APRA within 10 business days after the end of the relevant reporting month.
Specific instructions
Liabilities
1. Deposits from
Include current, term and certificates of deposit, placements and overdrawn nostro accounts.
Deposits from offshore banking units (refer to General Instructions) should be included in Item 1 (a).
“(c) Other" should include deposits from Commonwealth and State governments, other government bodies and financial institutions, which are not offshore banking units.
Deposits from related corporations and overseas offices should be included in Item 2.
2. Balances due to related corporations and overseas offices
Include all balances due to related corporations and overseas offices. Refer to General Instructions.
3. All other liabilities (excluding shareholders’ funds)
"All other liabilities" includes items in transit, accounts payable, prepayments received, accrued interest, etc.
4. Total liabilities
This item is the sum of Items 1 to 3.
Assets
6. Deposits and loans
Include in this item: overdrafts, placements, import and export finance and nostro accounts.
Deposits with related corporations and overseas offices should be included in Item 7.
7. Balances due from related corporations and overseas offices
Include all balances due from related corporations and overseas offices. Refer to general instructions.
8. All other assets
"All other assets" includes items in transit, accounts receivable, prepayments made, futures deposits and margins, accrued interest, etc.
Provisions for doubtful debts relating to exposures on the books of your offshore banking unit should be deducted from this item.