On 11 September 2011 the Deputy Prime Minister and Treasurer announced that a new cap for the Financial Claims Scheme for authorised deposit-taking institutions (FCS for ADIs) of $250,000 per person per ADI would be introduced from 1 February 2012, with transitional arrangements for pre-existing term deposits. Other announced changes include:
- removing coverage of foreign branches of Australian-incorporated credit unions, building societies and banks;
- enabling an additional payment option which would allow the Australian Prudential Regulation Authority to transfer deposits to a new institution;
- establishing a 'look-through' mechanism for certain pooled trust accounts; and
- enabling the Treasurer to activate the scheme earlier than the point of winding up.
Australian Government agencies are required to undertake a post-implementation review (PIR) of regulation introduced without a Regulation Impact Statement (RIS), unless the impact is of a minor or machinery nature and the regulation did not substantially alter previous arrangements. The absence of a RIS may be because an adequate RIS was not prepared or the Prime Minister granted an exemption for exceptional circumstances. A PIR must commence within one to two years of the implementation of the regulation, in line with the Government’s best practice regulation requirements. In October 2008 the FCS for ADIs was introduced. The FCS for ADIs applies to all ADIs – credit unions, building societies and banks – incorporated in Australia that take deposits. The FCS for ADIs is an element of Australia’s deposit protection arrangements and pays out depositors of an insolvent ADI in certain circumstances. A RIS was required for the October 2008 decision to introduce the FCS for ADIs, but was not prepared. As a result, a PIR was required within one to two years. The requirements have been met by producing a combined PIR and RIS. The PIR component reviews the FCS for ADIs as introduced in 2008, while the RIS component relates to changes to the FCS for ADIs, which were announced in September 2011. The PIR and RIS document was prepared by the Department of the Treasury and was assessed as adequate by the Office of Best Practice Regulation.