Document ID: chunk:federal_register_of_legislation:F2019L00648:body:0:p12
Version: federal_register_of_legislation:F2019L00648
Segment Type: other
Provision Reference: 
Character Range: 29851–32588

of the circumstances in which assets will be excluded from being assets in Australia. In particular, the common law may exclude certain assets from being assets in Australia.
    [2]  Special Purpose Vehicle is defined in paragraph 7(o).
   [3]  APRA has power under paragraph 8 to make a determination that the predominant function of a particular entity is to hold investments (whether directly or indirectly) for an insurer.  Where the beneficial interest is of a proprietary nature, paragraph 22 will be relevant.
   [4]  APRA monitors compliance with section 28 of the Act through completed reporting forms submitted by insurers in accordance with reporting standards made under the Financial Sector (Collection of Data) Act 2001.
   [5]  This does not include assets that are, under GPS 112, deducted from a locally incorporated insurer's Tier 1 Capital and included in its Tier 2 Capital.
   [6]  As well as applying to locally incorporated insurers, this paragraph has application, through paragraph 33, to Category C insurers.
   [7]  'Readily transferable' does not imply that there must be a liquid market for the share.  Rather, it refers to the ability to transfer the share to a willing purchaser free of any procedural or other impediment upon sale of the share.
   [8]  Note that paragraph 21 may also apply in relation to an SPV if the SPV is a trust.
   [9]  An interest in an SPV that is a subsidiary of an insurer may also be excluded from being an asset in Australia because of the application of paragraph 15 (irrespective of whether the subsidiary is part of the insurer's Extended Licensed Entity (ELE) or holds foreign assets).  Refer to Prudential Standard GPS 114 Capital Adequacy: Asset Risk Charge for the definition of and requirements relating to ELEs.  Further, an interest in an SPV that is a trust may be excluded from being an asset in Australia because of the application of paragraph 21 (irrespective of whether the trust is part of the insurer's ELE or holds foreign assets).
   [10]  This exception only applies where the locally incorporated insurer has an equitable interest of a proprietary nature in the real property (rather than, for example, a mere equitable interest in the due administration of the trust, or a contractual right to be delivered property of an equivalent value).
   [11]  Paragraph 21 may apply in relation to an SPV if the SPV is a trust (as well as applying to certain other kinds of trusts).
   [12]  Paragraph 22 will apply where, in a practical sense, the insurer might be said to beneficially own the trust property; e.g. where the insurer can request that the trustee transfer the full legal and beneficial interest in the property to the insurer, either immediately