APRA suspends licensing

APRA/covid-19/coronavirus/licensing/banks/superannuation/insurance/

8 April 2020
| By Mike |
image
image image
expand image

The Australian Prudential Regulation Authority (APRA) has suspended all new licensing.

The regulator has used a letter to banks, insurers and superannuation funds to inform them of the decision stating “the global COVID-19 virus has led to a fundamental change in the economic and social environment in Australia and globally”.

“In this current environment, APRA will temporarily suspend the issuance of new APRA licences, except in the rare case that the granting of a licence is necessary for APRA to carry out its mandate,” the letter said. 

“Financial institutions, particularly those that take customer deposits, look after superannuation funds or issue insurance, occupy a unique position of trust. The financial safety of these institutions is key to the financial stability and well-being of the community and, as a result, these institutions are subject to higher standards than many sectors of the economy. This includes higher entry standards. The process of granting an APRA licence is intended to help ensure that a new entrant will be able to honour the financial promises it makes under all reasonable circumstances.”

The letter said experience had shown that it was challenging for new entrants to succeed even under normal economic conditions, “which is why APRA does not consider it prudent to license APRA-regulated entities at this time”.

“As the operating environment stabilises, APRA will keep its approach under review and advise current applicants when the granting of licences will restart. However, APRA expects this temporary hold could last at least six months and delay APRA licences by at least this timeframe. During this time, APRA will continue to assess current licence applications so the delay on launching when the hold is lifted is minimised,” it said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 2 weeks ago

The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call....

4 days 5 hours ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

2 weeks 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

4 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5