Transcript Slide 1

APRA and XBRL:
Renewed interest after
seven years
Dr Steve Davies
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Overview
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APRA’s role
APRA Statistics improvement program
Use of XBRL
Outcome
Red tape review posed risks and opportunities
APRA and SBR
How to promote XBRL?
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APRA is the integrated prudential regulator
APRA’s role is to promote prudent behaviour of financial
institutions to enhance public confidence.
APRA must balance financial safety with efficiency,
competition, contestability and competitive neutrality.
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… supervising a diverse range of institutions…
APRA -regulated entities at 31 December 2008
Authorised deposit - taking institutions (ADIs)
Banks
Building societies
Credit unions
Other ADIs, including SCCIs
General insurers
Life insurers
Friendly societies
Superannuation funds
Number
200
Assets ($ billion)
2,755 .8
59
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122
8
13 1
32
23
5,097
2,649.4
21.0
45.4
10.0
93.4
210.4
6.2
595.0
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and collecting data from a range of non-regulated
institutions
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• Discretionary mutual funds
• Medical defence organisations
• Insurance intermediaries
• Registered financial corporations
• Wholesale funders
APRA has become a national financial sector
statistics agency
Our vision is of a prudentially well-managed, stable,
efficient and competitive finance sector brought about
through well-informed decision making.
Our mission is to provide essential information and analysis
on Australia’s financial sector that is deservedly trusted
and used by APRA, other regulators, policymakers,
researchers, industry and the public.
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… primarily supporting supervision
We provide supervisors with:
• Timely access to accurate returns from entities
• Time-series and peer-group reports for analysis
• The capability to create own reports
• Information on compliance of entities
• Responses from entities to queries
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… and other key decision makers
• We provide the RBA and ABS with daily data feeds
• We publish statistics on each regulated industry to inform
policymakers, the industry, researchers, analysts & public
• We provide senior management of regulated entities with
supervisory reports for them to track their performance
• We provide customised statistics on request
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Statistics improvement program
2000-2001
Developed infrastructure
• New legislative framework
• New IT systems
2001-now
Introduced modern data collections and
kept them up to date, eg IFRS, Basel II
2004-now
Focus on data quality and use of the data
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Our legislative framework gives us the
authority
• Financial Sector (Collection of Data) Act 2001
- APRA can determine reporting requirements
- Reporting entities must lodge on time
- APRA can ask questions
- APRA can require amendments
- Non-compliance is an offence
- APRA can impose penalties
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… and the responsibility
• Secrecy provisions of APRA Act 1998
- APRA must treat data as strictly confidential
- APRA can pass data onto RBA and ABS
- APRA can pass onto others with permission
- APRA can determine data to be non-confidential
after due consultation
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Direct to APRA (D2A) …
• Provides secure encryption
• Uses digital certificates for authentication and
authorisation
• Only downloads relevant forms
• Allows import of data from host systems
• Validates data prior to submission
• Allows retrieval of previously submitted data
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Data collections now contain
• Prudential data
- Financial accounts
- Capital adequacy
- Risk data
• Statistical data
- Monetary aggregates
- National accounts
- Market share
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Consultation ensures useful data collections
• Internal APRA consultation
- for relevance to supervision
• Tripartite Data Committee
- to integrate requirements of RBA and ABS
• Consultation with industry
- to ensure data are collectable in practice
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Why XBRL?
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Needed format to import data and transfer data
Microsoft Excel problematic
XBRL emerging standard
Nothing to lose by adopting XBRL
Also
• Little effort to update the taxonomy with systems/processes
• Little effort to reliably change data feeds
• Institutions required less support from APRA
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Outcome
• All but two institutions submit electronically using D2A
• Over 95% lodge on time and remainder within days
• A lot of effort ensures data quality
• Many banks use Excel to produce XBRL for D2A, although
bulk lodgers are the main beneficiaries
• XBRL taxonomy requires little maintenance within APRA and
RBA/ABS
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Rethinking regulation review
• In 2006, the Government review into regulatory burden
made recommendations to:
– develop a business reporting standard
– eliminate overlaps in information provided to regulators
– establish an integrated data collection portal
• Standard Business Reporting was born
Standard Business Reporting
Over $200m multi-agency programme to:
• harmonise financial reporting from business-to-government
into a single national taxonomy
• provide core IT services (routing, not sharing data)
• provide single authentication credential
Primarily aimed at small/medium businesses through software
vendors and intermediaries
Expected $800m per year saving to the economy
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Future for APRA data collection under SBR
• D2A stays
• Need to upgrade D2A to XBRL version 2.1
• Harmonise APRA’s 40,000 items into SBR taxonomy
• Replace authentication in D2A with SBR authentication
• Stay harmonised
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SBR AU taxonomy harmonisation
• Over 9,000 items from around 90 forms across twelve
federal and state agencies in scope. This reduced to less
than 3,000 items.
• APRA’s component reduced from 3,300 to 1,200 items.
• Most reduction came from dimensions, contexts and withinagency harmonisation. Less from across-agency
harmonisation.
How much to promote XBRL?
Potential benefits for institutions:
• Opportunity for financial institutions to use SBR for customer
data
• Taxonomy discipline will reduce unnecessary duplication in
reporting – use it or lose it
• Lower costs in aggregation/common software
• Guarantee?
• Competitors data available in XBRL feed?
Help? Case studies?
Summary
• APRA is integrated prudential regulator and national
financial sector statistics agency
• Implemented integrated suite of systems, legislation &
reporting requirements
• Used XBRL because no downside and low maintenance
• All institutions voluntarily use D2A, some use XBRL
• Red tape review posed risks and opportunities
• APRA now harmonising with SBR
• How should best promote uptake by financial institutions?
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Our IT infrastructure gives us the platform
This white area represents the recommended maximum area for graphics
(tables, graphs, diagrams, photos)
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Example forms in D2A
Recommended maximum area for graphics (tables, graphs, diagrams, photos)
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Example: daily feed to RBA in XBRL
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