Proposed changes to modernised Economic and Financial Statistics reporting standards and guidance

To: All Authorised Deposit-taking Institutions and Registered Financial Corporations 

The Australian Prudential Regulation Authority (APRA) is releasing updated Economic and Financial Statistics (EFS) reporting standards and guidance for consultation. APRA has drafted these proposed changes with the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA) (collectively, ‘the agencies’).

Background

The EFS collection is administered on behalf of the ABS and the RBA by APRA in its role as national statistical agency for the financial sector. It consists of data collected from authorised-deposit-taking institutions (including banks, building societies and credit unions) and registered financial corporations. The collection is comprised of 22 Reporting Standards and 30 forms. 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 EFS collection commenced in March 2019. 

Updates to EFS reporting standards and guidance:

a) Aligning EFS business size definitions with the new capital framework 

In 2021, APRA finalised amendments to the capital framework to align Australian standards with the internationally agreed Basel III requirements¹. One element of the new framework was a change to eligibility threshold for loans to be classified as ‘SME retail’, which has generated inconsistency between business size thresholds in the capital framework and the EFS collection. To address this inconsistency, the agencies are proposing changes to reporting requirements to align business size definitions in the EFS collection with those in the new capital framework.

The agencies propose 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, in line with the capital framework changes. Reporting entities that already classify businesses as SME Retail, SME Corporate or Corporate according to the BCBS/APRA methodology can continue to use a one-to-one mapping to the EFS classifications (as per existing guidance in RPG 701.0 ABS/RBA Reporting Concepts for the EFS Collection (RPG 701.0)).

For further information see Appendix A and the draft ARS 701.0 ABS/RBA Definitions for the EFS Collection.

b) Clarifying reporting requirements for holdings of covered bonds 

An inconsistency has been noted regarding the expected reporting of holdings of covered bonds. The agencies are proposing a minor clarification of reporting requirements to address potential confusion caused by this inconsistency.

This proposed change involves minor amendments to ARS 701.0 and RPG 701.0 to clarify that entities should report holdings of both resident- and non-resident-issued covered bonds. The current definition of covered bonds references ADIs, which could imply that only resident-issued covered bonds should be reported. The agencies understand that most entities are already reporting non-resident-issued covered bonds and are therefore unlikely to be affected by this change.

For further information see Appendix A and the draft RPG 701.0 ABS/RBA Reporting Concepts for the EFS Collection.

Changes a) and b) affect the following EFS forms:

• ARF_720_4
• ARF_720_6
• ARF_721_0B
• ARF_730_1
• ARF_741_0
• ARF_742_0A
• ARF_742_0B
• ARF_748_0A
• ARF_748_0B

c) Minor changes to the EFS Priority Listing for Data Items

The agencies have conducted a review of 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). This is the first review of the priority of data items in EFS since the implementation of the collection in 2019.

Based on their experience using EFS data since 2019, the agencies are proposing changes that would affect data items on 22 of the 30 EFS forms, which would result in a small net increase in the number of high and very high priority data items. The agencies have considered industry burden and aimed to balance proposed increases in priority with decreases elsewhere. Increases in priority reflect the use of data items in key agency outputs, such as ABS or RBA statistical publications (for example, GDP and Financial Aggregates) and regular policy analysis (for example, briefings for the Reserve Bank Board). The proposed changes aim to maintain high levels of data quality for these critical data items.

ARS_722_0 ABS/RBA Derivatives has been added to the EFS Priority Listing for Data Items for completeness without any change in data priorities.

For further information, including the forms affected by this change, see the following documents:

• Summary of Changes to EFS Data Priority Listing, and
   
• Priority listing for data items in the EFS Collection

Next steps 

APRA invites submissions on the proposed changes, including feedback on the feasibility of making any necessary updates in time for the reporting period ending 30 June 2024. 

Please refer to the draft reporting standard, practice guide and Priority Listing documentation released together with this letter, which include the proposed changes marked up. Written submissions on the proposal should be sent to DataConsultations@apra.gov.au by 6 November 2023 and addressed to:

Chief Data Officer
Technology and Data Division
Australian Prudential Regulation Authority

Yours sincerely,

Surabhi Jain
Chief Data Officer
Technology and Data Division

Footnote

¹  Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks.

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