APRA signals tougher enforcement approach
The Australian Prudential Regulation Authority (APRA) has signalled its intention to adopt a much tougher approach, including using the full range of its formal powers including directions powers and license condition powers.
The tougher APRA approach is based on the findings of the APRA Enforcement Review and has seen the regulator declaring it will approach the use of its enforcement powers to prevent and address serious prudential risks, and to hold entities and individuals to account.
It said the new Enforcement Approach was founded on the results of its Enforcement Review, conducted by APRA Deputy Chair John Lonsdale which made seven recommendations designed to help APRA better leverage its enforcement powers to achieve sound prudential outcomes.
It said the recommendations of the Review would still mean that APRA as a safety regulator remained focused on preventing harm with the use of non-formal supervisory tools.
“However, APRA will be more willing to use the full range of its formal powers – such as direction powers and licence conditions – to achieve prudential outcomes and deter unacceptable practices,” Lonsdale said.
APRA chairman, Wayne Byres said APRA would implement all the recommendations, including:
- adopting a “constructively tough” appetite to enforcement and setting it out in a board-endorsed enforcement strategy document;
- ensuring APRA supervisors are supported and empowered to hold institutions and individuals to account, and strengthening governance of enforcement-related decisions;
- combining APRA’s enforcement, investigation and legal experts in one strengthened support team, and ensuring resources are available to support the pursuit of enforcement action where appropriate; and
- strengthening cooperation on enforcement matters with the Australian Securities and Investments Commission (ASIC).
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
