Commonwealth Consolidated Acts Commonwealth Consolidated ActsPersons to whom requirements apply
(1) This section applies to a person who is or has been an auditor of a body corporate that is:
(a) an ADI; or
(b) an authorised NOHC; or
(c) a subsidiary of an ADI or an authorised NOHC; or
(d) if an ADI is a subsidiary of a foreign corporation (whether or not the ADI is itself a foreign ADI):
(i) another subsidiary (a relevant Australian - incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is incorporated in Australia; or
(ii) another subsidiary (a relevant foreign - incorporated subsidiary ) of the foreign corporation (other than a body mentioned in paragraph (a), (b) or (c)), being a subsidiary that is not incorporated in Australia and carries on business in Australia.
Matters requiring immediate notice
(2) If the person has reasonable grounds for believing that:
(a) the body corporate is insolvent or there is a significant risk that the body corporate will become insolvent; or
(b) an existing or proposed state of affairs may materially prejudice the interests of:
(i) if the body corporate is an ADI or a subsidiary of an ADI--the depositors of the ADI; or
(ii) if the body corporate is an authorised NOHC or a subsidiary of an authorised NOHC--the depositors of any ADI that is a subsidiary of the authorised NOHC; or
(iii) if the body corporate is a relevant Australian - incorporated subsidiary or a relevant foreign - incorporated subsidiary of a foreign corporation--the depositors of any ADI that is a subsidiary of the foreign corporation;
the person must immediately notify APRA in writing of the matter.
Offences in relation to matters requiring immediate notice
(3) A person commits an offence if the person contravenes subsection (2).
Penalty: Imprisonment for 6 months.
(4) A person commits an offence if the person contravenes subsection (2). This is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
Defence if matter already notified
(5) Subsections (3) and (4) do not apply to a person in relation to a matter referred to in subsection (2) if:
(a) the person becomes aware of the matter because the person is informed of it by a director or senior manager of the body corporate; and
(b) the director or senior manager informs the person that the body corporate has notified APRA in writing of the matter; and
(c) the person has no reason to disbelieve the director or senior manager.
Note: The defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code .
Matters requiring notice as soon as practicable
(6) If the person has reasonable grounds for believing that:
(a) the body corporate has failed or will fail to comply with:
(i) a provision of this Act, the regulations, the Financial Sector (Collection of Data) Act 2001 or the Financial Accountability Regime Act 2023 ; or
(ii) if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC--a prudential standard; or
(iii) if the body corporate is an ADI or authorised NOHC, or a subsidiary of an ADI or authorised NOHC--a direction under Division 1BA of Part II or section 29; or
(iv) if the body corporate is an ADI--a condition of the body corporate's section 9 authority; or
(v) if the body corporate is an authorised NOHC--a condition of the body corporate's NOHC authority; and
(b) the failure to comply is or will be significant (see subsection (7));
the person must give APRA a written report about the failure as soon as practicable, and in any event no later than 10 business days.
(7) For the purposes of paragraph (6)(b), a failure to comply is or will be significant if the failure is or will be significant having regard to any one or more of the following:
(a) the number or frequency of similar failures;
(b) the impact the failure has or will have on the body corporate's ability to conduct its business;
(c) the extent to which the failure indicates that the body corporate's arrangements to ensure compliance with this Act, the prudential standards or the regulations might be inadequate;
(d) the actual or potential financial loss arising or that will arise from the failure:
(i) if the body corporate is an ADI--to the depositors of the body corporate; or
(ii) to the body corporate;
(e) any matters prescribed by the regulations for the purposes of this paragraph.
Offences in relation to matters requiring notice as soon as practicable
(8) A person commits an offence if the person contravenes subsection (6).
Penalty: Imprisonment for 6 months.
(9) A person commits an offence if the person contravenes subsection (6). This is an offence of strict liability.
Note: For strict liability , see section 6.1 of the Criminal Code .
Defence if failure already notified
(10) Subsections (8) and (9) do not apply to a person in relation to a failure to comply referred to in subsection (6) if:
(a) a director or senior manager of the body corporate informs the person that the body corporate has informed APRA in writing of the failure; and
(b) the person has no reason to disbelieve the director or senior manager.
Note: The defendant bears an evidential burden in relation to the matters in subsection (10). See subsection 13.3(3) of the Criminal Code .
Offence in relation to subsections (5) and (10)
(11) A person commits an offence if:
(a) the person is a director or senior manager of a body corporate referred to in subsection (1); and
(b) the person knows that there are reasonable grounds for believing a thing referred to in subsection (2) or (6); and
(c) the person informs an auditor of the body corporate that the body corporate has informed APRA in writing of the thing; and
(d) the body corporate has not done so.
Penalty: Imprisonment for 12 months.