The Australian Prudential Regulation Authority (APRA) has released for consultation a discussion paper detailing proposals on the implementation of an Early Access Facility for Depositors under the Financial Claims Scheme (FCS) for authorised deposit-taking institutions (ADIs).
The FCS was established in October 2008 and is designed to provide depositors with timely access to their deposits in specified covered financial products, up to a defined amount (up to $1 million per depositor in any one ADI until 12 October 2011), in the event that their ADI becomes insolvent. The Government will review the FCS deposit limit by October 2011.
APRA is administrator of the FCS. APRA has the ability to determine the most appropriate payment method by which account-holders are to be paid out under the FCS on a case-by-case basis, taking into account the particular circumstances of a failed ADI.
APRA’s intention is to provide accountholders with access to their deposits up to the FCS limit under the Early Access Facility for Depositors as soon as possible following the declaration of the FCS. To do that, ADIs must provide reliable data in the required format.
APRA will release a draft reporting standard later in 2010 that sets out further detail on proposed information collection requirements. Once the requirements are finalised, there will be a transition period to allow industry time to make changes to their information technology systems for FCS purposes.
Submissions on the discussion paper are due by 12 March 2010.