Australian Prudential Regulation Authority
{{Short description|Regulatory body for the Australian financial sector}}
{{Use dmy dates|date=November 2022}}
{{Infobox government agency
|agency_name = Australian Prudential Regulation Authority
|type = Statutory authority
|nativename =
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|nativename_r =
|logo = APRA logo.jpg
|logo_width = 200px
|logo_caption =
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|formed = {{Start date|1998|07|01|df=y}}
|preceding1 = Insurance and Superannuation Commission
|preceding2 = Reserve Bank of Australia
|preceding3 = Australian Financial Institutions Commission
|dissolved = Australian Prudential Regulation Commission
|superseding =
|jurisdiction = Commonwealth of Australia
|headquarters = 1 Martin Place, Sydney, New South Wales
|coordinates =
|employees = {{formatnum:844}} {{small|({{as of|2022|alt=2021–2022}})}}{{Cite web|url=https://www.apra.gov.au/sites/default/files/2022-10/APRA%202021-22%20Annual%20Report_2.pdf|title=APRA Annual Report 2021-22|date=30 June 2018|website=Australian Prudential Regulation Authority|access-date=29 October 2022}}
|budget =
|minister1_name = Jim Chalmers {{post-nominals|country=AUS|MP}}
|minister1_pfo = Treasurer of Australia
|minister2_name =
|minister2_pfo =
|chief1_name = John Lonsdale
|chief1_position =
Chair
|chief2_name = Margaret Cole
|chief2_position =
Deputy Chair
|chief4_name = Suzanne Smith
|chief4_position =
Member
|chief5_name = Therese McCarthy Hockey
|chief5_position =
Member
|agency_type =
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|keydocument1= {{Cite Legislation AU|Cth|act|apra1998|Australian Prudential Regulation Authority Act, 1998}}
|website = {{URL|www.apra.gov.au}}
|footnotes =
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The Australian Prudential Regulation Authority (APRA) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. APRA was established on 1 July 1998 in response to the recommendations of the Wallis Inquiry. APRA's authority and scope is determined pursuant to the {{Cite Legislation AU|Cth|act|apra1998|Australian Prudential Regulation Authority Act, 1998}}.
Regulatory scope
APRA was established on 1 July 1998. It oversees banks, credit unions, building societies, friendly societies, general insurance, health insurance, reinsurance, and life insurance companies, and most members of the superannuation industry. It ensures that these institutions keep their financial promises; that is, that they will remain financially sound and able to meet their obligations to depositors, fund members and policy holders. APRA currently supervises institutions holding A$8.6 trillion in assets for Australian depositors, policyholders and superannuation fund members. APRA is largely funded by levies on the financial institutions that it supervises.
Executive
APRA is governed by an Executive Group, usually consisting of four people. All are statutory appointees. The current Chair of APRA is John Lonsdale and the Deputy Chair is Margaret Cole. Suzanne Smith and Therese McCarthy Hockey are additional APRA Members.
History
The Insurance and Superannuation Commission (ISC) was formally established on 23 November 1987, following the proclamation of the Insurance and Superannuation Commissioner Act 1987. It was constructed from the Superannuation Division of Treasury, The Office of the General Insurance Commissioner, The Office of Life Insurance Commissioner, and The Office of the Australian Government Actuary. The commission was based at the Australian Automobile Association Building, Canberra212 Northbourne Avenue and also had offices in Melbourne and Sydney. The Insurance and Superannuation Commission was absorbed into the Australian Prudential Regulation Authority on 1 July 1998.
In June 1996, the Financial System Inquiry (known as the Wallis Inquiry) was established to examine the results of the deregulation of the Australian financial system, to examine the forces driving further change, particularly technological, and recommend changes to the regulatory system to ensure an "efficient, responsive, competitive and flexible financial system to underpin stronger economic performance, consistent with financial stability, prudence, integrity and fairness."{{Cite web|url=https://treasury.gov.au/review/financial-system-inquiry/|title=Financial System Inquiry|website=Treasury.gov.au}}
At the time, the regulators of the Australian financial services industry were based on the institutions and not the regulatory function. APRA's predecessor regulators were the Insurance and Superannuation Commission, the Reserve Bank of Australia and the Australian Financial Institutions Commission (AFIC). The Wallis Inquiry recommended a new structure.[http://www.aph.gov.au/LIBRARY/Pubs/bd/1997-98/98bd203.htm Parliamentary Library] {{webarchive |url=https://web.archive.org/web/20060911090914/http://www.aph.gov.au/LIBRARY/Pubs/bd/1997-98/98bd203.htm |date=11 September 2006 }}
The role of the Reserve Bank of Australia (RBA) was amended to deal with monetary policy and systemic stability with the Payments System Board considering payments systems regulation. The role of the Australian Prudential Regulation Commission (later to become APRA) was amended to deal with prudential regulation of authorised deposit-taking institutions (ADIs), life and general insurance, and superannuation including Industry superannuation. The Corporations and Financial Services Commission was renamed and its role expanded as the Australian Securities and Investments Commission (ASIC) to deal with market integrity, consumer protection and corporations.
APRA was established on 1 July 1998 under the Australian Prudential Regulation Authority Act 1998.
APRA became prominent in the collapse of HIH Insurance in 2001 and for its investigation into the National Australia Bank foreign currency deal scandal in 2004.
APRA took over the previous role of the Private Health Insurance Administration Council in July 2015.{{Cite web|url=https://www.apra.gov.au/media-centre/speeches/opening-statement-house-representatives-standing-committee-economics-0|title=Opening statement to the House of Representatives Standing Committee on Economics|last=ARPA|date=2017-11-22|website=apra.gov.au|language=en|access-date=2018-06-04}}
In 2018, Peter Harris, the chair of the Productivity Commission, was critical of the role of APRA in limiting price competition in banking.{{Cite news|url=http://www.afr.com/business/banking-and-finance/financial-services/productivity-commission-and-banks-at-loggerheads-on-competition-20180228-h0wtom#ixzz58UlxJr70 |title=Productivity Commission and banks at loggerheads on competition |author=Eyers, James |date=1 March 2018 |work=Financial Review |location=Australia |access-date=1 March 2018}} Representatives of APRA appeared before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry during 2018.{{Cite news|url=http://www.afr.com/business/banking-and-finance/financial-services/apra-boss-wayne-byres-prepared-to-lift-10pc-investor-lending-cap-20180228-h0wtn3|title=APRA boss Wayne Byres prepared to lift 10pc investor lending cap |author=Eyers, James |date=1 March 2018 |work=Financial Review |location=Australia |access-date=1 March 2018}}
In 2018, APRA created the restricted authorised deposit-taking institution (RADI){{cite web|title=APRA finalises new Restricted ADI licensing framework|url=http://www.apra.gov.au/MediaReleases/Pages/18_18.aspx|website=APRA|access-date=11 May 2018|archive-url=https://web.archive.org/web/20180509080324/http://www.apra.gov.au/MediaReleases/Pages/18_18.aspx|archive-date=9 May 2018|url-status=dead}} licensing framework to encourage new entrants and competition to the existing banking system.{{cite web|title=APRA consults on changes to authorising new entrants to banking industry|url=http://www.apra.gov.au/MediaReleases/Pages/17_31.aspx|website=APRA|access-date=11 May 2018|archive-url=https://web.archive.org/web/20180511214733/http://www.apra.gov.au/MediaReleases/Pages/17_31.aspx|archive-date=11 May 2018|url-status=dead}}
In 2025, APRA has again increased the cash reserve requirement for ANZ Group, raising it to A$1 billion from A$750 million, citing continued failures in managing non-financial risks. APRA said these issues may extend beyond the trading desk and that ANZ’s current risk management improvements are insufficient. ANZ said in a separate statement that it had accepted all recommendations of the review, and was taking immediate actions in response to the review and the undertaking with APRA. Mark Evans, currently head of Singapore, Southeast Asia, India and the Middle East, will take up the new role of group head of non-financial risk program.{{Cite news |date=April 3, 2025 |title=Australian regulator increases ANZ's capital add-on, criticizes bank's risk culture |url=https://www.reuters.com/business/finance/australia-regulator-accepts-anzs-undertaking-fix-risk-culture-hikes-capital-add-2025-04-02/}}
Prudential Standards and Practice Guides
APRA establishes prudential standards with which regulated institutions must comply.{{Cite web|title=What does APRA do? {{!}} APRA|url=https://www.apra.gov.au/what-does-apra-do|access-date=2020-12-14|website=apra.gov.au}} It also creates and maintains Prudential Practice Guides (PPGs) to provide guidance on APRA's view of "sound practice" in particular areas for specific industries, as well as areas common to most APRA-regulated entities ("cross-industry guides"). PPGs frequently discuss statutory requirements from legislation, regulations or APRA's prudential standards, but do not themselves create enforceable requirements.{{Cite web|last=APRA|title=PRUDENTIAL PRACTICE GUIDE PRUDENTIAL PRACTICE GUIDE – CPG 234 Information Security – June 2019|url=https://www.apra.gov.au/sites/default/files/cpg_234_information_security_june_2019_1.pdf|website=apra.gov.au}}
| class="wikitable"
|+Common cross-industry standards and guides{{Cite web|title=Prudential and Reporting Standards for Authorised deposit-taking institutions {{!}} APRA|url=https://www.apra.gov.au/industries/1/standards|access-date=2020-12-14|website=apra.gov.au}} !Area !Standard !Practice Guide |
| 110 – Internal Capital Adequacy Assessment Process and Supervisory Review
| |[https://www.apra.gov.au/sites/default/files/2019-06/CPG%20110%20ICAAP%20and%20Supervisory%20Review%20March%202013.pdf CPG 110 (March 2013)] |
| 220 – Risk Management
|[https://www.legislation.gov.au/Details/F2019L00669 CPS 220] |[https://www.apra.gov.au/sites/default/files/CPG%20220%20April%202018.pdf CPG 220 (Apr 2018)] |
| 226 – Margining and Risk Mitigation for Non-centrally Cleared Derivatives
|[https://www.legislation.gov.au/Details/F2022L00614 CPS 226] | |
| 231 – Outsourcing
|[https://www.legislation.gov.au/Details/F2016L01436 CPS 231] |[https://www.apra.gov.au/sites/default/files/PPG-231-Outsourcing-Oct-06.pdf CPG 231 (Oct 2006)] |
| 232 – Business Continuity Management
|[https://www.legislation.gov.au/Details/F2016L01431 CPS 232] | |
| 233 – Pandemic Planning
| |[https://www.apra.gov.au/sites/default/files/Prudential-Practice-Guide-CPG-233-Pandemic-Planning-May-2013_1.pdf CPG 233 (May 2013)] |
| 234 – Information Security
|[https://www.legislation.gov.au/Details/F2018L01745 CPS 234] |[https://www.apra.gov.au/sites/default/files/cpg_234_information_security_june_2019_1.pdf CPG 234 (Jun 2019)] |
| 235 – Managing Data Risk
| |[https://www.apra.gov.au/sites/default/files/CPG-235-Managing-Data-Risk.pdf CPG 235 (Sep 2013)] |
| 320 – Actuarial and Related Matters
|[https://www.legislation.gov.au/Details/F2018L00746 CPS 320] |[https://www.apra.gov.au/sites/default/files/cpg_320_actuarial%20and%20related%20matters.pdf CPG 320 (Jul 2019)] |
| 510 – Governance
|[https://www.legislation.gov.au/Details/F2019L00662 CPS 510] | |
| 511 – Remuneration
|[https://www.legislation.gov.au/Details/F2021L01644 CPS 511] |[https://www.apra.gov.au/sites/default/files/2021-12/Prudential%20Practice%20Guide%20CPG%20511%20Remuneration%20-%2018%20October%202021.pdf CPG 511 (Oct 2021)] |
| 520 – Fit and Proper
|[https://www.legislation.gov.au/Details/F2018L01390 CPS 520] | |
See also
Notes
{{Reflist|group=Note}}
References
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External links
{{subject bar|auto=y|d=y|Australia|Economics}}
- {{official website|http://www.apra.gov.au}}
{{Banking Industry in Australia}}
{{Business in Australia |state=autocollapse}}
{{Law enforcement in Australia}}
{{Authority control}}
Category:1998 establishments in Australia
Category:Commonwealth Government agencies of Australia