Treasury proposes enforcement changes
Court enforceable undertakings, the regulators’ disqualification regime and co-operation between the Australian Prudential Regulation Authority (APRA) and professional industry bodies are among the enforcement and other issues addressed in a discussion paper released by the Federal Government.
Pointing out that APRA presently only has the power to accept court enforceable undertakings issued under the Insurance and Superannuation Industry Supervision (SIS) Acts, it proposes that APRA be allowed to “tailor its enforcement action to the situation and have the power to also accept undertakings under the Banking and Life Acts”.
The paper also points out a lack of consistency across prudential Acts in the provisions for disqualification of responsible persons, auditors and actuaries.
“It is proposed that both APRA and the ATO’s [Australian Taxation Office’s] disqualification regime could be enhanced by increasing its flexibility across industries.”
It also said aspects of the current legislation “prohibit the disqualification mechanism from being used in a manner that reflects the nature and severity of the contravention that led to the disqualification”.
With regard to APRA powers relating to the appointment of actuaries and auditors, the paper proposes a bolstering of APRA’s enforcement capabilities in directing an entity to remove a disqualified person.
While this is currently only possible under the Banking Act, the paper calls for provisions allowing APRA to direct a regulated entity to remove an auditor or actuary not meeting “fit and proper requirements” to be inserted into the Insurance, Life and SIS Acts.
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