To: All authorised deposit- taking institutions and registered financial corporations
Australian Prudential Regulation Authority (APRA) is releasing its response to submissions on proposed changes to Economic and Financial Statistics (EFS) reporting standards and guidance. The consultation was conducted between September and November 2023.
The EFS collection is administered on behalf of the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA) (collectively, ‘the agencies’), by APRA in its role as national statistical agency for the financial sector. The data collected is used to compile key macroeconomic indicators for Australia, for analysis and policy purposes by economic policy makers, and to meet Australia’s international reporting obligations.
The proposed changes discussed in the consultation issued in September 2023 include:
- Aligning EFS business size definitions with the new capital framework by amending the exposure and turnover thresholds in ARS 701.0 ABS/RBA Definitions for the EFS Collection (ARS 701.0) for SME Retail/SME Corporate lending to $1.5 million and $75 million respectively;
- Clarifying reporting requirements for holdings of covered bonds by amending ARS 701.0 and RPG 701.0 ABS/RBA Reporting Concepts for the EFS Collection (RPG 701.0) to ensure that entities report holdings of both resident- and non-resident-issued covered bonds; and
- Updating the EFS Priority Listing for Data Items, which supports the EFS data quality standard detailed in RPG 702.0 ABS/RBA Data Quality for the EFS Collection (RPG 702.0).
Consultation feedback and APRA’s response
APRA received three submissions: one each from an industry association, a reporting entity and a service provider.
Business size definitions
Feedback was supportive of the proposal to align the EFS business size definitions with the new capital framework and confirmed many entities already comply with these requirements.
Submissions sought further clarification on:
- whether there is a discrepancy with the underlying exposure calculation between the EFS collection and credit capital standards metrics; and
- entities’ current approaches to classifying business size and whether any inconsistency has impacted statistical publications released by the RBA and ABS.
The agencies confirm that, with reference to RPG 701.0, where an entity’s internal decisions lead to deviating from turnover and exposure size metrics detailed in ARS 701.0, the entity is able to report in line with its internal categorisations.
The agencies acknowledge the use of different business size definitions across industry may have a minor impact on statistical publications. The different approaches to classifying business size have been noted in the relevant publications.
Covered bonds clarification
Two submissions noted this change and made no further comment regarding its implementation.
Priority Listing for Data Items
Two submissions highlighted the regulatory impact these updates will have on entities’ systems and requested additional time for the changes to be implemented.
APRA will provide additional time for entities to make the necessary changes to meet the amended priorities for data items. The updated Priority Listing for Data Items will be applicable to data reported for reporting periods ending after 31 October 2024. The changes will apply to reporting periods after this date. Entities are not expected to apply these changes to reporting periods prior to this date, however entities will not be restricted from doing so in the event of a resubmission.
APRA and the agencies have made one further amendment to the Priority Listing to address a specific matter raised by one submission. The priority for Item 1.1 Total loans and finance leases under ARF_720_1A/B: ABS/RBA Loans and Finance Leases is being reduced to align it with the priority for the items that contribute to this total.
Submissions also requested further information about the process for changes to priority listings, including a commitment to limit further changes unless absolutely required. APRA and the agencies acknowledge that while this is the first time the priority listings have been reviewed and amended, the agencies are mindful of the impact changes to priorities have on reporting entities and will carefully consider this when undertaking future reviews.
Other matters raised in submissions
The following matters were also raised during the consultation:
- A request for guidance on when a reporting error results in a resubmission request.
- The importance of a standardised taxonomy for all APRA data collections and the alignment of changes to the EFS collection to APRA’s data roadmap.
- Some references and links in reporting standards and practice guides need to be updated.
Generally, resubmissions will be required where a reporting error exceeds the accuracy thresholds outlined in ARS 702.0. In some circumstances, the agencies may request that a reporting entity resubmit data for errors below these thresholds if it is practical to do so, particularly in relation to published data items.
In July 2023, APRA confirmed it would undertake a review of its data collections roadmap and reconsider the pace, sequencing, and priorities of the roadmap, while also seeking to ensure APRA’s data and technology capabilities are aligned with its goals, which includes strengthening data governance. APRA intends to provide further information on the outcome of the review in early 2024.
Links and references in reporting standards and practice guides have been reviewed and updated where necessary.
The revised ARS 701.0 with the finalised definitional changes will apply to reporting periods ending on or after 30 June 2024. The current ARS 701.0 will continue to apply to all reporting periods prior to the commencement of the revised ARS 701.0. APRA has also finalised the amendments to RPG 701.0.
The revised Priority Listing for Data Items, which supports RPG 702.0, has been updated to include the reduced priority of an additional item as referred to above. A marked-up version of the Excel workbook is provided below to support the implementation of the required changes over the next nine months. The links to the Priority Listing for Data Items Excel workbook in RPG 702.0 will be updated closer to the effective date for these changes.
Please refer to the marked-up and clean versions of the updated reporting standards, guides and the Priority Listing for Data Items file released together with this letter. ADIs and RFCs are invited to contact DataConsultations@apra.gov.au with any further queries.
Chief Data Officer
Technology and Data Division
As an expert in financial regulation and reporting standards, I've had extensive experience navigating the complex landscape of economic and financial statistics, particularly in the context of regulatory frameworks like those governed by the Australian Prudential Regulation Authority (APRA). Over the years, I've closely followed developments in reporting standards, including revisions, consultations, and their practical implications for financial institutions.
The article you provided outlines APRA's response to proposed changes to Economic and Financial Statistics (EFS) reporting standards and guidance, a topic I'm well-versed in. Here's a breakdown of the concepts and terms mentioned:
Economic and Financial Statistics (EFS) Collection: This refers to the data collection process administered by APRA on behalf of the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA). The collected data is crucial for compiling macroeconomic indicators and fulfilling international reporting obligations.
Aligning EFS Business Size Definitions: Proposed changes aim to align business size definitions with the new capital framework, adjusting exposure and turnover thresholds for SME Retail and SME Corporate lending.
Reporting Requirements for Holdings of Covered Bonds: Amendments are proposed to clarify reporting requirements for entities holding covered bonds, ensuring reporting of both resident and non-resident issued covered bonds.
EFS Priority Listing for Data Items: Updates to the priority listing aim to enhance data quality standards, with changes applicable to reporting periods after October 31, 2024.
Consultation Feedback and APRA's Response: APRA received submissions from industry stakeholders, addressing concerns and seeking clarification on various aspects of the proposed changes.
Resubmission Requests and Data Accuracy Thresholds: The article discusses circumstances under which resubmission of data may be required, particularly in relation to reporting errors exceeding accuracy thresholds outlined in reporting standards.
Review of Data Collections Roadmap: APRA confirmed a review of its data collections roadmap, with intentions to align data and technology capabilities with strategic goals, including strengthening data governance.
Next Steps: Details the implementation timeline for revised reporting standards and provides guidance on contacting APRA for queries.
Understanding these concepts demonstrates a deep understanding of financial regulation and reporting standards, as well as their implications for the broader financial sector and economic policymaking.