APRA has released a new class approval on the form and operation of required disclosures by foreign ADIs taking deposits in Australia under section 11E of the Banking Act 1959.

The new requirements commence on 1 October 2015 with a six-month transition period ending on 1 April 2016.

Prior to the opening of an account, the transfer of an account from another person or the taking of an initial deposit, a foreign ADI must provide the person with a written disclosure statement.

The statement must be prominently displayed and clearly written in plain language.

The statement must disclose that provisions in the Banking Act 1959 for the protection of depositors do not apply to foreign ADIs including the foreign ADI making the disclosure and that depositors with foreign ADIs do not receive the benefit of certain protections including the following:

• deposits are not covered by the financial claims scheme and are not guaranteed by the Australian Government
• Deposits do not receive priority ahead of amounts owed to their creditors

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