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
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
